Money Flow Indicator (MFI) – assesses the intensity of money inflows, comparing positive and negative price increases over a certain period of time.
Purpose Money Flow Indicator
Indicators can be used to determine the oversold and overbought status of funds and even the point of reversal.
The dividing line between overbought and oversold:
1-If the index goes higher than 80, the funds are overbought. When the indicator crosses the overbought boundary from above, it is a sell signal;
2-If the index falls below 20, the funds are oversold. When the indicator crosses the oversold boundary from below, it is a buy signal for the funds.
Indicator differences and quotations:
1-When the exchange rate rises to a new maximum value and the corresponding indicators cannot prove it, this is a signal that the upward trend is weak and it is possible to fall back;
2-When the exchange rate falls to a new minimum value and the corresponding indicators cannot prove it, this is a signal that the downward trend is weak and it is possible to rise again.