LazyBear

Indicator: Market Facilitation Index [MFIndex]



***** NOTE: You may see all GREEN circles (it is due to a recent TV update). To work around this issue, change the "Circles" to "Cross" via Format -> Style *****

Market Facilitation Index , by Bill Williams , plots the effectiveness of price movement by computing the price movement per volume unit.

4 possible combinations of MFIndex and Volume are:

Green :
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MFIndex increases and the volume increases. This means that the amount of participants entering the market increases, therefore the volume increases and the fresh incoming players align their positions in the direction of candlestick growth.

Fade :
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MFIndex falls and volume falls. It means that the market participants are indifferent and the price movement is small on small volumes. This usually happens at the end of a trend.

Fake :
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MFIndex increases, but the volume falls. It is highly likely that the market is being supported by broker speculation and not any significant client volume .

Squat :
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MFIndex falls, but the volume increases. In this particular situation bulls and bears are fighting between themselves to see who will dominate the next trend. These battles are noticeable by the large sell and buy volumes. However, the price does not change appreciably since the strengths are equal. One of the competing parties either the buyers or the sellers will ultimately triumph in the battle. Usually, the fracture of such a candle indicates if this particular candle determines the continuation of the trend, or terminates the trend.

More info: http://en.wikipedia.org/wiki/Market_facilitation_index

Code: http://pastebin.com/Y9qYTW2R
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//
// @author LazyBear
// @credits http://en.wikipedia.org/wiki/Market_facilitation_index
//
// If you use this code in its original/modified form, do drop me a note. 
//
study("Market Facilitation Index [LazyBear]", shorttitle="MFIndex_LB", overlay=true)
plot_offs=input(0.005, title="Indicator offset % (below low)")
r_hl=roc((high-low)/volume,1)
r_v=roc(volume,1)
green_f= (r_hl > 0) and (r_v > 0)
fade_f=(r_hl < 0) and (r_v < 0)
fake_f=(r_hl > 0) and (r_v < 0)
squat_f=(r_hl < 0) and (r_v > 0)
b_color = green_f ? green : fade_f ? blue : fake_f ? gray : squat_f ? red : na
plot(low - (low*plot_offs), color=b_color, style=circles, linewidth=4)
Thanks for the starting point! I wanted an indicator that showed a histogram on the bottom, so modified your original code as follows to do it:

//@version=2
study("Market Facilitation Index", shorttitle="MFIndex_CSA")
p_range=roc((high-low)/volume,1)
plt_range=(high-low)
plt_mfi=(plt_range/volume)
t_volume=roc(volume,1)
green_wdw= (p_range > 0) and (t_volume > 0)
fade_wdw=(p_range < 0) and (t_volume < 0)
fake_wdw=(p_range > 0) and (t_volume < 0)
squat_wdw=(p_range < 0) and (t_volume > 0)
b_color = green_wdw ? green : fade_wdw ? blue : fake_wdw ? gray : squat_wdw ? red : na
plot(plt_mfi, color=b_color, style=histogram, linewidth=4)

This would have been a far more difficult task had I not had your model to start with. Thanks again!!

Chuck
+1 Reply
Great indicator! Can we please request the option to be added which allows the colorization of the price bars? How about the standard MFI histogram with the colorization? Thank You !
Reply
LazyBear PRO coondawg71
Here you go..this version will color bars or draw histo (based on HL ROC) - http://pastebin.com/Kwbv7qrT

Sample chart:
snapshot
Reply
Perfect! Thanks LB
Reply
LazyBear PRO coondawg71
yw :)
Reply
wow! don't look, but it makes the US stock "markets" look even scarier!!!
Reply
Question: The MFI is supposed to use tick volume in it's measure ("trends come from off the floor"). I don't see that anywhere here. What am I missing?
Reply
the_batman the_batman
Where are the ticks?

I checked out the wikipedia article you posted. It's vague and/or wrong. (I'm not sure what a "volume unit" is.) Referring back to the original source material, the original name of this badboy was "mileage per tick". I was just wondering if you'd implemented it as such (correctly) or the normal way (incorrectly, with volume in lieu of tick volume).
Reply
LazyBear PRO the_batman
Tick volume data is not available here. The best you can do is 1min.
+1 Reply
Thanks. Possible to code a version that uses multiple bars per indicator bar (ie for a 5-min chart where you wanna see the MFI of the hour?)
Reply
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