What it measures

The money flow index is an RSI computed on money flow instead of price: each bar's typical price multiplied by its volume, sorted into positive flow when the typical price rose and negative when it fell. The idea is that momentum backed by volume is more meaningful than momentum alone.

The calculation

raw money flow = typical price × volume money ratio = Σ positive flow over n bars / Σ negative flow over n bars MFI = 100 − 100 / (1 + money ratio)

Unlike the RSI the sums are plain sums, not Wilder-smoothed.

Inputs and defaults

  • Length: 14.
  • Thresholds: 80 and 20, stricter than the RSI's because the series is choppier.

How it is read

Above 80 is overbought, below 20 oversold, with the same caveat as every oscillator: in a trend it pins. Divergence between MFI and price is read as volume failing to confirm the move.

Where it fails

It inherits the RSI's trend problem and adds volume's venue problem: on crypto the volume field is exchange-specific and sometimes inflated, so the flow it measures is one venue's flow. The unsmoothed sums make it jump when a single heavy bar enters or leaves the window.

How the desk reads it

Volume-conditioned oscillators are read with the question of which venue's volume they were fitted to, and then like any oscillator: on what the thresholds did in the trending year.

In the desk's screen

Of the 614 screened strategies in the library, 5 (0.8%) use this indicator somewhere in their logic.

2 of those were gross-profitable on enough cells to reach the after-fee replay.

The count is read from the compiled code of each strategy in the library; a strategy that computes the indicator by hand under another name is not counted. The desk's own rules are not part of the count.