The Money Flow
Index indicator ( MFI
) is a tool used in technical analysis
for measuring buying and selling pressure. This is done through analyzing both price and volume
. The MFI's calculation generates a value that is then plotted as a line that moves within a range of 0-100, making it an oscillator. When the MFI
rises, this indicates an increase in buying pressure. When it falls, this indicates an increase in selling pressure. The Money Flow
Index can generate several signals, most notably: overbought and oversold conditions, divergences, and failure swings.