Money Flow Index
MFI

The Money Flow index includes beside the real market prices still the turnovers in the calculation. He images a sort of turnover-momentum. The typical abbreviation is MFI.

The MFI is based on the idea that it will be invested in a title if the value closes near the day's high. If the closing market price lies near the day's low, money is taken away from the title.
The calculation follows on the basis of the so-called "typical price " whom we have introduced to the Commodity Channel index. If the current price is higher than the yesterday's, one speaks of a positive monetary flow (Money Flow). If the current price lies lower, one speaks of a negative Money Flow.
On the basis of these both figures the Money-Ratio is formed. At the end this Ratio is standardised to receive a representation better to be interpreted. By the standardisation sways  the MFI always around the 50th line with the maximum 100 and the minimum 0.

Calculation:

MFI = 100 - (100 : (1 + MR))

MR = ((+Yt) + (+Yt-1) + (+Yt-2)... + (+Yt-n+1)) : ((-Yt) + (-Yt-1)...+ (-Yt-n+1))

mit MR=Money Ratio, +Y=Positiver Money Flow, -Y = Negativer Money Flow

Xt = (H + L + C) : 3

wenn Xt > Xt-1 dann +Y1 = Xt * V und -Y1 = 0
wenn Xt < Xt-1 dann +Y1 = 0 und -Y1 = Xt * V

H=day's high, L=day's low, C=closing market price, X=typical price

Interpretation:
Due to his calculation the MFI rises with rising market prices, with falling market prices he falls. Because beside the market prices also the turnovers play a role, strong movements point in the MFI always to especially high turnovers or very strong market price changes at the day before.

As a standard signal the crossing with the 50th line is interpreted. A breakthrough bottom up delivers a purchase signal, a breakthrough top down a sales signal. Alternatively one can also put a sliding average above the MFI and interpret the cuts between GD and MFI as signals, like with the MACD.

Beside this interpretation many analysts also use divergences between basis value and MFI to the signal generation. If the market price rises even further, the MFI falls, is to be calculated at a quick end of the upward movement. Same is valid in reverse manner with still falling market prices and rising MFI.

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