money flow

The Money Flow Index creates a ratio of Positive Money Flow and Negative Money Flow over time and scales it to a number between 0 and 100. The MFI value can be used to evaluate overbought and oversold conditions in a security the index moves above or below a certain reference level (Investor/RT defaults to 80 for overbought and 20 for oversold). Divergence between MFI and the price direction can also be indicative of a reversal. If price is trending higher and MFI is decreasing over that period, a market top may occur.

A technical indicator that keeps a running total of the money flowing into and out of a security. Money flow (MF) is calculated by multiplying the number of shares traded by the change in closing price. If prices close higher, money flow increases (by an amount equal to average price * volume / volume divisor). If prices close lower, money flow decreases (by an amount equal to average price * volume / volume divisor). Average price is equal to the average of the high, low, and closing prices. A running total is kept by adding or subtracting the current result from the previous total.