Money Flow Index: MFI analyses tutorial with 4H candlesticks

16 maj 2021

MFI or Money Flow Index as a strategy is quite similar to RSI or Relative Strength Index. The key differentiator for MFI is the consideration of volume.

• Money Flow Index oscillator:
• MFI uses both price and volume to measure buying and selling pressure.
  
• MFI oscillates between 0 to 100.
  
• Intuitively, the volume-weighted feature makes MFI a comparatively better 'Lead' indicator than the RSI.
  
• Most reversals can be identified and acted upon best through the Money Flow Index oscillator.
  

MFI above 80 indicates Overbought territory. It suggests that the underlying asset is driven by a buying pressure.
MFI below 20 indicates Oversold territory. It indicates a selling pressure.


*MFI crossing over 20 gives a BUY signal.

*MFI crossing down the 80 mark gives a SELL signal.

Stop loss should be used as a precautionary measure.
Trailing stop loss can be used to let the profits ride, while ensuring safety in case of trend reversals.


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