TRADING WITH THE MONEY FLOW INDEX

摘要

The Money Flow Index (MFI) is a momentum indicator that measures the strength of money flowing into and out of a security. It uses both price and volume to measure buying and selling pressure.This information can then inform the trader on when to enter or exit a position in the security being analyzed. Created by Gene Quong and Avrum Soudack, the MFI is related to the relative strength index (RSI), but where the RSI only incorporates price in its calculation, the MFI accounts for volume. The MFI starts with the typical price for each period. Money flow is positive when the typical price rises, indicating buying pressure, and negative when the typical price declines, indicating selling pressure. A ratio of positive and negative money flow is then plugged into an RSI formula to create an oscillator that moves between 0 and 100. As a momentum oscillator tied to volume, the MFI is best suited to identify reversals and price extremes with a variety of signals. "Apple momentum" (right) shows Apple (AAPL) stock along with the MFI indicator.