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_faci...

Code: http://pastebin.com/Y9qYTW2R
Open-source script

In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.

Want to use this script on a chart?
//
// @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)
List of my free indicators: http://bit.ly/1LQaPK8
List of my indicators at Appstore: http://blog.tradingview.com/?p=970

Comments

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
+7 Reply
MartisDon CA2015Wb
@CA2015Wb, thx man
+1 Reply
@CA2015Wb, thanks a lot!!!
Reply
etzilla CA2015Wb
@CA2015Wb, Thanks a lot!
Reply
Nice job on this one.

Would be much easier to read this if we had candle volume chart type.
+2 Reply
LazyBear QuantitativeExhaustion
Thx
+2 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 !
+1 Reply
LazyBear cooney_s
Here you go..this version will color bars or draw histo (based on HL ROC) - http://pastebin.com/Kwbv7qrT

Sample chart:
Reply
cooney_s LazyBear
Perfect! Thanks LB
Reply
LazyBear cooney_s
yw :)
Reply
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