What is the Money Flow Index (MFI)?

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by fredrick , in category: Stocks and Equities , 9 months ago

What is the Money Flow Index (MFI)?

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1 answer

by augustus.ziemann , 8 months ago

@fredrick 

The Money Flow Index (MFI) is a technical indicator that measures the momentum of money flowing in and out of a financial instrument. It is used to identify overbought or oversold conditions in the market. The MFI combines price and volume data to calculate a value between 0 and 100. A reading above 80 is considered overbought, indicating a potential reversal in price, while a reading below 20 is considered oversold, suggesting a potential price bounce. Traders often use the MFI to confirm trends and identify divergences that might signal a change in price direction.