Money Flow Index Explained | A Volume-Based Indicator

The Money Flow Index (MFI) indicator has some distinct advantages over other volume-based indicators such as On-Balance Volume and Accumulation/Distribution.
Because the output from the Money Flow Index is a range-bound oscillator, this is something that many algorithmic traders will feel more comfortable about implementing in their algos.
While all three of these volume-based indicators can be used by discretionary systematic traders, OBV and A/D are slightly more challenging for algo traders, and you'll need fairly good coding skills to take full advantage of them. The MFI however, ranges between 0 and 100 and so algo rules can be more easily coded for this indicator.
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This is Episode 75 in the Darwinex 'Algo Trading for a Living' Playlist, and Episode 15 of the new 'Volume Data' mini-series.
Video Contents:
00:00 Introduction
02:05 Comparing Money Flow Index with OBV and A/D
03:47 On-Balance Volume vs Money Flow Index
04:23 Money Flow Index Calculation
07:10 Use of 'Typical Price'
07:37 Overbought/Oversold
08:20 Divergences between price and money flow
08:47 Summary and Conclusions
Content Disclaimer: Past performance is not a reliable indicator of future results. The contents of this video (and all other videos by the presenter) are for educational purposes only and are not to be construed as financial and/or investment advice.
Risk disclosure: www.darwinex.com/legal/risk-d...

[@haseenmultimedia3103]

wow, you explain things with the coder in mind. I have been mql4 programming for years and fine tuning. You have explained the MFI better than anyone else. Thank you.

[@h.anthonymontgomeryii9898]

What else could you want from this video? Amazing video, amazing explanation, thank you. Now to help me understand it, I’m gonna go ahead and plot the equations variables for equation visualization. 👌🏽

[@h.anthonymontgomeryii8735]

Wow, so both the Money Flow Index and the OBV use the whole volume (bullish & bearish combined) value for positive or negative movement based on the price action candles bias (whether bullish or bearish). The MFI multiplies that volume times the price when the candle was bullish or bearish to create the UP or DOWN money flow, the OBV subtracts or adds it depending on if it's bullish or bearish to the previous value. The A/D however, doesn't credit the whole (bullish & bearish combined) volume value, it seeks specificity and only takes a portion of that volume in order to narrow down on specific bullish or bearish volume. I'm a big fan of the Money Flow Index and I want to use it, but it seems like the calculation of the UP money flow and the DOWN money flow can capitalize on the specificity of the A/D multiplier calculations. Do you think this is a good idea? If so, is there something like this already out there? Should I make it? What are your thoughts?

[@tao4124]

Thank you very much.

[@khalidbinreaz8039]

lovely...... wait for next episode 😍😍😍

[@abhishekjain3045]

thanks for great content , happy to find this channel .

[@SufianLau]

Clear and useful! Subscribed!

[@leeles]

Thanks, well explained and illustrated with helpful examples!

[@Darwinexchange]

Glad it was helpful!

[@thedailygrind5224]

Excellent video

[@shwetal1]

TO THE POINT...GREAT VIDEO

[@leonjbr]

Interesting. Wainting for the next video to see this in practice.

[@optionrmi]

Intraday trade setup? OBV and OI

[@ryguyiskindofaflyguy]

So if price is going up, rsi is going up but mfi is going down, how would you interpret that?