Money Flow Index (MFI)

An RSI with volume

MFI treats each candle's "typical price × volume" as a chunk of money: a rising typical price counts as inflow, a falling one as outflow. Heavy-volume candles carry more weight.

Also 0–100

MFI above 80 is overbought, below 20 is oversold. As with RSI, overbought doesn't mean an immediate drop.

Jumps when a huge-volume candle leaves the window

MFI only looks at the last 14 bars. When a huge-volume candle enters the window the reading jumps; 14 bars later it slides out and MFI suddenly jumps the other way, even though price may have done nothing. When MFI changes abruptly, first check which candle entered or left the window.

Key takeaways

• MFI treats "typical price × volume" as money flow: a rising typical price counts as inflow, a falling one as outflow, then it works out the inflow share like RSI.
• MFI > 80 is overbought, < 20 oversold. As with RSI, overbought can persist in a strong trend.
• Because it includes volume, high-volume moves affect MFI more. When a huge-volume candle drops out of the window, MFI can suddenly jump.

Try it yourself

You can do these exercises in this lesson's interactive simulation:

1. In "Single huge-volume day," hover over bar 70: what are MFI and RSI? Which one dropped into the oversold zone below 20?
2. Switch volume to "All equal": how do the shapes of MFI and RSI change? What does that say about the biggest difference between them?
3. Hover around bar 84: what happens to MFI when the huge-volume candle slides out of the 14-bar window?
4. Switch to "Uptrend": how long did MFI stay above 80? Did price drop right away?

Quiz and explanations

1. What's the biggest difference between MFI and RSI?

Answer: MFI takes volume into account.MFI = RSI with volume added.

2. MFI = 15 is…

Answer: Oversold.Below 20 is oversold.

3. If every candle had exactly the same volume, MFI would become…

Answer: Very close to an RSI based on typical price.With equal volume, every candle has the same weight, so MFI only compares price moves and looks much like RSI.

Terms in this lesson

• MFI (Money Flow Index): A 0–100 indicator combining price and volume; above 80 is overbought, below 20 oversold.
• overbought (Overbought): An indicator reading near the top, meaning price has risen a lot recently, though it won't necessarily fall right away.
• oversold (Oversold): An indicator reading near the bottom, meaning price has fallen a lot recently, though it won't necessarily bounce right away.
• RSI (Relative Strength Index): A 0–100 indicator comparing average gains with average losses over a period; above 70 is overbought, below 30 oversold.
• typical price (Typical Price): (High + low + close) ÷ 3, a single number for a candle's price level, used by CCI and MFI.