What is the Index ( )?
The Index ( ) is a technical oscillator that uses price and for identifying overbought or oversold conditions in an asset. It can also be used to spot divergences which warn of a trend change in price. The oscillator moves between 0 and 100.
Unlike conventional oscillators such as the ( ), the Index incorporates both price and data, as opposed to just price. For this reason, some analysts call the volume-weighted .
What Does the Index ( ) Tell You?
One of the primary ways to use the Index is when there is a divergence. A divergence is when the oscillator is moving in the opposite direction of price. This is a signal of a potential reversal in the prevailing price trend.
For example, a very high Index that begins to fall below a reading of 80 while the underlying security continues to climb is a price reversal signal to the downside. Conversely, a very low reading that climbs above a reading of 20 while the underlying security continues to sell off is a price reversal signal to the upside.
Traders also watch for larger divergences using multiple waves in the price and . For example, a stock peaks at $10, pulls back to $8, and then rallies to $12. The price has made two successive highs, at $10 and $12. If makes a lower higher when the price reaches $12, the indicator is not confirming the new high. This could foreshadow a decline in price.
The overbought and oversold levels are also used to signal possible trading opportunities. Moves below 10 and above 90 are rare. Traders watch for the to move back above 10 to signal a long trade, and to drop below 90 to signal a short trade.
Other moves out of overbought or oversold territory can also be useful. For example, when an asset is in an uptrend, a drop below 20 (or even 30) and then a rally back above it could indicate a pullback is over and the price uptrend is resuming. The same goes for a downtrend. A short-term rally could push the up to 70 or 80, but when it drops back below that could be the time to enter a short trade in preparation for another drop .
Reference : https://www.investopedia.com/terms/m/mfi...
** Since each instrument in the list has its own unique contract data, you must first enter its name to display it. I recommend you to select OANDA from the markets. Finally, when the reports are issued, it may repaints. However, this repaint is usually close to closing or after close .(When reports are so sharp ) So use this script only 1W ( 1 week ) or 1 M ( 1 month ) timeframe.
** This data is taken to Tradingview with the help of Quandl. This is a very low possibility, but the system will not work if there is a malfunction.
*** Working with all (Including : Bitcoin )
*** If you dont work with "Futures" , you can select "Others" from switchable menu and use for all instruments.
*** New generation elegant design used : Adaptive coloring Overbought - Oversold Levels according to the closing price.
NOTE : This code is open source under the MIT License. If you have any improvements or corrections to suggest, please send me a pull request via the github repository https://github.com/user-Noldo
Stay tuned. Best wishes !
It will likely be released as a new script.
Under Construction ⏸