Get started

MFI

VOLUME INDICATORS, PART 2. SEVEN COMMON VOLUME INDICATORS.Understanding Volume Indicators: Volume indicators are essential tools for traders and analysts, providing insights into market activity and sentiment. In this guide, we'll explore seven common volume indicators and how you can use them to enhance your trading strategies. 1. Volume Volume is the simplest volume indicator, representing the total number of shares or contracts traded over a specific period. It's like the crowd size at a Super Bowl game—when the stadium is packed and roaring, it indicates a lot of interest and activity. Similarly, high trading volume suggests significant buying or selling activity in the market. Traders often use volume to confirm the strength of price movements and identify potential trends. Volume, the bedrock of volume analysis, represents the total number of shares or contracts traded over a specific period. Common parameter values range from 20 to 50 periods for short-term analysis and 100 to 200 periods for long-term trends. Remember, volume precedes price movements, so significant changes can hint at impending shifts in direction. 2. On-Balance Volume (OBV) On-Balance Volume (OBV) adds a cumulative total of volume when the price closes up and subtracts it when the price closes down. It's akin to keeping score of how loud each team's fans are cheering during the Super Bowl game. If one team's supporters get louder as the game progresses, it suggests growing momentum for that team. Likewise, OBV helps traders gauge buying and selling pressure, providing insights into potential price movements. A rising OBV indicates bullish momentum, while a falling OBV suggests bearish sentiment. On-Balance Volume (OBV) tracks cumulative volume based on price movements. Set your period length typically between 14 to 20 periods for optimal results. A rising OBV confirms bullish trends, while a falling OBV suggests bearish sentiment. Divergences between OBV and price often foreshadow reversals. 3. Accumulation/Distribution Line (A/D Line) The Accumulation/Distribution Line (A/D Line) combines price and volume to show how much of a security is being accumulated or distributed. It's like a tug-of-war between the two teams during halftime at the Super Bowl. The team with more supporters pulling harder gains ground. Similarly, the A/D Line measures the battle between buyers and sellers. If it's trending upwards, it suggests that accumulation (buying) is outweighing distribution (selling), indicating potential upward price movement. The Accumulation/Distribution Line (A/D Line) gauges the flow of funds into or out of a security. Optimal period lengths range from 14 to 30 periods. Rising A/D Line values signal accumulation and potential price appreciation, while declining values indicate distribution and possible downturns. 4. Chaikin Money Flow (CMF) Chaikin Money Flow (CMF) measures the flow of money into or out of a security based on both price and volume. It's akin to checking the enthusiasm of the fans after each touchdown at the Super Bowl. If the fans are still hyped and buying team merchandise, it suggests sustained enthusiasm and support. CMF helps traders assess the strength of buying or selling pressure. A positive CMF suggests buying pressure, while a negative CMF indicates selling pressure. Chaikin Money Flow (CMF) measures buying and selling pressure relative to price movements. Common period lengths vary from 10 to 30 periods. Positive CMF values indicate buying pressure, while negative values suggest selling pressure. Look for divergences between CMF and price for early reversal signals. 5. Volume Weighted Average Price (VWAP) Volume Weighted Average Price (VWAP) calculates the average price a security has traded at throughout the day, weighted by volume. It's like a buffet at a Super Bowl party where each dish is labeled with the average popularity rating from all the guests. The more popular dishes have a higher average rating. Similarly, VWAP gives traders a sense of the average price level where most trading activity has occurred. Traders use VWAP to assess whether their trades were executed at favorable prices relative to the day's average. Volume Weighted Average Price (VWAP) calculates the average price weighted by volume. Period lengths typically range from 20 to 50 periods. VWAP acts as a dynamic support or resistance level, guiding traders on optimal entry and exit points. Monitor deviations from VWAP to identify potential trend shifts. 6. Money Flow Index (MFI) The Money Flow Index (MFI) measures the rate at which money is flowing into or out of a security based on both price and volume. It's akin to fans at the Super Bowl game exchanging team merchandise and tickets. The more transactions happening, the more money is flowing between fans. MFI helps traders gauge market sentiment. A high MFI suggests strong buying pressure, while a low MFI indicates selling pressure. Traders often look for divergences between MFI and price movements to anticipate potential reversals. The Money Flow Index (MFI) evaluates the rate of money flow into or out of a security. Optimal period lengths usually range from 10 to 20 periods. High MFI values indicate overbought conditions, while low values suggest oversold conditions. Watch for divergences between MFI and price for reversal signals. 7. Volume Rate of Change (VROC) Volume Rate of Change (VROC) measures the rate of change in volume over a specific period, showing whether volume is increasing or decreasing rapidly. It's like measuring the acceleration or deceleration of the crowd's excitement level during different parts of the Super Bowl game. If the crowd gets louder and louder as the game progresses, it indicates increasing excitement and momentum. Similarly, a rising VROC suggests increasing buying or selling activity, while a falling VROC suggests waning activity. Volume Rate of Change (VROC) measures the rate of change in volume over a specific period. Common period lengths vary from 10 to 20 periods. Rising VROC values signify increasing volume momentum, indicating potential price continuation. Falling values may precede price reversals. GME and VOLUME? Let's go back and see GME on the Weekly In conclusion, volume indicators provide valuable insights into market sentiment and potential price movements. By understanding and incorporating these indicators into your trading strategy, you can make more informed decisions and improve your overall trading performance. REMEMBER, no one indicator on it's own tells you much, but a lot of different indicators all telling you the same thing at the same area... pay attention to that kind of confirmation. Hope this helps!! I've linked PART 1, 10 COMMON INDICATORS. This post is all Volume related. You can go in depth with all of these, I don't find it necessary for most traders, but the option is there, however, you'll need someone more advanced than myself to help you through that.
NASDAQ:TSLAEducation
by nicktussing77
New Top, Old Resistance: Mixed News Question Bullish SupertrendNew Top, Old Resistance: Mixed News Question Bullish Supertrend Dear Esteemed Traders, TECHNICAL ANALYTICS Zooming out on the chart, ES hit a level that might be a resistance since January 2022, formed by a previous top. Historic tops often act as a resistance. Alone this would be a weak indication, but the price managed to hit that level at the same time when it also met the rising resistance from historic bottoms. See the red line on the chart. I can observe double bearish signals on a bullish super trend, in which the price seems to have crossed down together with the EMAs in the previous month. I wouldn't call super trend bearish yet, but the so far strong bullishness of it became questionable. MACD made a bearish cross and made a journey towards the bearish side of the indicator below the price chart. RSI went extremely negative after an extended period spent in the upper half of the indicator. It means that ES might have been overbought, and the market signals the start of a correction to this overboughtness. The possible correction move paired with a volume that matches the buy volume candles of the mentioned rally. This volume profile further powers the idea that the people who have been buying ES since October might feel the level to take profit on their investments. The Money Flow Index (MFI) at the bottom and Bull-Bear Power (BBP) above it share the bearish view. BBP isn't too bearish, but it's been showing a weakening bullish power since December. Finally, the $4736 support seems to be holding up the market from crashing. If the support breaks, the price can fall to the next support. I observed a support of around $4600. These are the analytics, I found, but let's consider news trading. NEWS The Federal Reserve has signaled its intention to raise interest rates in an effort to combat inflation. This could weigh on stocks, as higher interest rates can make borrowing more expensive for businesses and consumers. Recent economic data has been mixed, with some indicators showing signs of slowing growth. This could raise concerns about the health of the economy and further dampen investor sentiment. Earnings season is underway, and some companies have reported disappointing results. This could lead investors to expect lower earnings growth overall, which could put downward pressure on stock prices. In total, I wouldn't call ES straight bearish, but I claim the bullish trend to weaken and I'm looking for shorts below the $4736 support line. Greetings, Ely
CME_MINI:ES1!Short
by Elysian_Mind
Total index analysis Crypto Total 2 has broken down the upward channel and has tested the supportbelow it, now we can see this weekly candel is now open and heading upward. besides that we can see an obvious RD + in MACD and MFI. and Elon Musk just tweeted again! so in my opinion we are about to see a pullback to the broken channel and after that we have to see if there is any sign of getting back to the uptrend or that is just a technical pull back and we have to get ready for a massive dump and a long bear market for crypto market . im bearish until i see areal good sign here. the first target for the market total is retesting 2017 high. comment your opinions down below:)
CRYPTOCAP:TOTAL
by sobhanjtn
Can Chainlink (LINK) Achieve a New Annual Peak?Chainlink (LINK) has witnessed a substantial surge in the past two weeks and is now approaching the prospect of a new yearly high. Both weekly and daily timeframe analyses exhibit bullish tendencies, which is supported by the price action MFI. How Far Can Chainlink's Uptrend Continue? Looking at the weekly technical analysis, LINK's price has been on the rise since June, recovering from a low of $4.75. This ascent resulted in the reclamation of the $5.80 horizontal support zone, which has been held since April 2022. Moreover, this upward trajectory was accompanied by a bullish divergence in the MFI. The Money Flow Index (MFI) is a momentum indicator for traders to gauge market conditions, identify overbought or oversold levels, and inform buy or sell decisions. Readings above 50 coupled with an upward trend indicate a bullish trend, while readings below 50 suggest the opposite. A bullish divergence arises when the MFI shows a lower value while the price is higher. The daily timeframe paints a bullish picture. Additionally, the MFI is holding strongly above 50. If the uptrend continues, LINK may reach the yearly high of around $8.80, which is 20% higher than the current price. However, given that the overall market is not bullish whatsoever, at this moment it is unlikely to make any significant breakthrough. Looking Ahead: Despite the current trend LINK is unlikely to rise significantly over the yearly high at $8.80. On the other side, if the price starts descending, the $5.80 support level will be the next target to the downside.
by cryptohopper
What Is The Money Flow Index (MFI) in Trading?The Money Flow Index (MFI) is an indicator that measures the flow of money into and out of a particular financial asset and provides insights into the strength and direction of price trends. It’s an oscillator, like the RSI, Stochastic, and Awesome Oscillator. Moreover, it provides similar signals to the Stochastic. Is it worth learning about? Definitely, and in this FXOpen article, we will explain why. What Is the Money Flow Index? Developed by Gene Quong and Avrum Soudack, the MFI combines price and volume data to gauge the buying and selling pressure in the market. What is the Money Flow Index definition? The MFI is categorised as an oscillator, meaning that it fluctuates between 0 and 100, indicating overbought and oversold conditions. Traders often use it to identify potential reversal points and generate buy or sell signals. The Money Flow Index is used in crypto*, forex, and commodity markets. You can use it to analyse stock money flow data. Money Flow Index Formula To calculate the Money Flow Index, several steps are involved. Let's break down the formula: Typical Price (TP): This is the average of the high, low, and closing prices for a specific period. Money Flow (MF): This step calculates the amount of money flowing into or out of the asset. Positive Money Flow (PMF): This stands for the money flow on days when the current typical price is higher than the previous one. Negative Money Flow (NMF): This stands for the money flow on days when the current typical price is lower than the previous one. Money Ratio (MR): This measures the ratio between positive and negative money flows. Money Flow Index: Finally, the MFI is calculated by normalising the money ratio and converting it into a value between 0 and 100. TP = (High + Low + Close) / 3 MF = TP * Volume PMF = Sum of MF for all up days in the specified period NMF = Sum of MF for all down days in the specified period MR = PMF / NMF Money Flow Index = 100 - (100 / (1 + Money Ratio)) The MFI is typically calculated over a period of 14 days, but this setting can be adjusted to suit different trading strategies and timeframes. The common rule is that a shorter period suits strategies where a trader opens trades very often as the oscillator generates signals frequently, while a longer period is used by traders who aim for longer-term trades as the oscillator generates signals rarely, but they are considered more reliable. How to Use the MFI in Trading By providing insights into buying and selling pressure, the MFI helps traders identify overbought and oversold conditions, divergences, and failure swings, which can be used to generate potential trading signals. Overbought/Oversold Conditions As the MFI is an oscillator that fluctuates within a specific range, it’s quite easy to identify overbought/oversold market conditions using it. When the MFI rises above 80, it indicates an overbought condition, suggesting that the asset may be due for a price correction or a downward trend. An overbought condition implies excessive buying pressure, and a reversal in price might be imminent. Conversely, when the MFI drops below 20, it signifies an oversold condition, indicating excessive selling pressure and a potential upward price reversal. It's important to note that overbought or oversold conditions alone do not guarantee an immediate change in price direction. Traders wait for the oscillator to exit the overbought/oversold zone before they open a trade. When the MFI rises above 20, it’s usually considered a “buy” signal, while a fall below the 80 level may be considered a “sell” signal. In the Money Flow Index chart above, the indicator left the overbought area (1) before a solid downtrend started. A trader could use the MFI signal to enter a short trade; however, the index entered the oversold area (2), which could be considered a sign of a trend reversal, but the reversal didn’t happen, and the price continued moving down. Note: Oscillators can test overbought/oversold areas several times before an actual reversal occurs. Moreover, the indicator may provide incorrect signals in strong trends. Therefore, traders never use the indicator without a confirmation received from other technical analysis tools or fundamental data. Divergences MFI divergence occurs when the price and the MFI move in opposite directions. This can be bullish or bearish, providing valuable insights into potential trend reversals. Bullish divergence happens when the price forms lower lows while the MFI forms higher lows. This suggests that despite the price declining, buying pressure is increasing, indicating a possible upward movement. Conversely, a bearish divergence occurs when the price forms higher highs while the MFI forms lower highs, indicating a potential downward movement. In the chart above, the price formed a bearish divergence with the Money Flow Index, and the price declined significantly. Failure Swings Failure swings, also known as "bullish failure swings" or "bearish failure swings," are powerful signals generated by the Money Flow Index. A failure swing occurs when the MFI reaches overbought or oversold levels and then fails to surpass its previous peak or trough. This failure to exceed previous levels suggests a weakening of the prevailing trend and the possibility of a reversal. In a bullish failure swing, the MFI drops below the oversold level, rallies, manages to stick above the oversold area, although the price sets a new low, and then makes a new high. This indicates that despite the initial selling pressure, buyers are stepping in, creating a potential buying opportunity. Conversely, in a bearish failure swing, the MFI rises above the overbought level, declines, manages to stick below the 80 level although the price makes a new high, and then makes a new low. This shows that despite the initial buying pressure, sellers are entering the market, signalling a potential selling opportunity. In the chart above, the price was moving in a strong downward trend, but the MFI didn’t enter the oversold area after leaving it at the end of October. Once the indicator broke its previous high (1), a trend reversal was confirmed. Failure swings aren’t a common signal that traders use when trading with the Money Flow Index. However, they can be an additional tool to confirm price movements. To practise and develop your own Money Flow Index strategy, you can use the free TickTrader platform that implements over 600 trading instruments that you can trade with FXOpen. Final Thoughts The Money Flow Index is an effective indicator. Its signals are straightforward, and it has only one parameter, a period; therefore, even a trader with little experience will be able to customise it so it empowers their trading strategy. Although the calculations seem complicated, the tool is built to run automatically on trading platforms. Still, traders need to remember that the Money Flow Index should be used as part of a comprehensive trading plan and combined with proper risk management techniques. Traders can practise using the MFI on a demo account or backtest it on historical data to gain familiarity and confidence before applying it to live trading. When you feel comfortable with the indicator, you can open an FXOpen account. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice. *At FXOpen UK and FXOpen AU, Cryptocurrency CFDs are only available for trading by those clients categorised as Professional clients under FCA Rules and Professional clients under ASIC Rules, respectively. They are not available for trading by Retail clients.
Education
by FXOpen
UUUU entry - sub $6Energy Fuels (UUUU) is a Uranium and Vanadium mining company that is domestically sourced low carbon renewable energy fuel (U( and steel strengthener (V2O5). * Improving earnings - nearing profitability * Domestic contract growth * By-product Vanadium is also in demand - steel recycling * Energy market can not rely on oil and LNG alone * MFI crossing 50% and consolidation and buying will increase scarcity * CCI momentum hitting bottom Entry this week after dropping below $6 with limit buys and retracing back to 238 fib level. Will watch for drop to full retrace to $4.90 (exit before) or a more likely climb to 500 retracement at $8 and watch for break through or more consolidation. Own opinions of energy market - come to own conclusions, or comments here welcomed. Like to hear what others in energy market have to say. Warm winter LNG will get us through, what stocks are you loving for 2023? @Pokethebear @rudcharts
AMEX:UUUU
by Pokethebear
2
NYSE:JNJ 13th FEBRUARY 2023The trendline is the most common part of technical analysis in forex trading. But when compared to support and resistance, trendlines are less commonly used. The trendline should be more significant due to the number of touches. Trendlines are very suitable in combination with several technical indicators, one of which is the Money Flow Index ( MFI ). MFI is an indicator used to measure money inflows and outflows from local and foreign investors in the stock. Since MFI measures money inflows and outflows, it also involves volume in its indicator. In other words, MFI also measures market interest in a stock (inflows and outflows are closely related to market interest). That's why MFI also includes volume in its indicator. How to read the MFI indicator is very easy, almost the same as how to read other indicators, such as the relative strength index, stochastic, and others. MFI has 2 main boundary lines, the overbought and oversold lines. The overbought line is at 80 and above. The oversold line is 20 and below (note the arrow above). This means that if the MFI indicator is at 80 and above, there has been too much money inflow from investors, which causes the stock price to rise, thus causing overbought. Meanwhile, if the MFI indicator is at 20 and below, there is too much money outflow from investors, which causes the stock price to fall, causing oversold.
NYSE:JNJLong
by DNP-FX
2
JAPAN225 12th JANUARY 2023The trendline is the most common part of technical analysis in forex trading. But when compared to support and resistance, trendlines are less commonly used. The trendline should be more significant due to the number of touches. Trendlines are very suitable in combination with several technical indicators, one of which is the Money Flow Index (MFI). MFI is an indicator used to measure money inflows and outflows, both from local and foreign investors in the stock. Since MFI measures money inflows and outflows, it also involves volume in its indicator. In other words, MFI also measures market interest in a stock (inflows and outflows are closely related to market interest). That's why MFI also includes volume in its indicator. How to read the MFI indicator is very easy, almost the same as how to read other indicators, such as the relative strength index, stochastic, and others. MFI has 2 main boundary lines, the overbought and oversold lines. The overbought line is at 80 and above. The oversold line is at 20 and below (note the arrow above). This means that if the MFI indicator is at 80 and above, there has been too much money inflow from investors, which causes the stock price to rise, thus causing overbought. Meanwhile, if the MFI indicator is at 20 and below, there is too much money outflow from investors, which causes the stock price to fall, causing oversold.
OANDA:JP225USDLong
by DNP-FX
6
Bitcoin MFI Weekly (50 period)MFI (Money Flow Index) period adjustment. The default setting is 14-periods, but this can be adjusted to suit analysis needs. A shorter timeframe makes the indicator more sensitive. A longer timeframe makes it less sensitive. Given the less sensitive, the extreme measure are more prone to real Money Flow. Bitcoin Cycle MFI Lows Observe the MFI Period at 50 for smooth sensitive on the weekly. - 2012 $3 difference from cycle low ($2 -$5) reading of 40.05 - 2015 Cycle low triggered from MFI reading of 39.54 - 2018 Cycle low (2 week variance) triggered again from MFI a reading of 39.44 - 2022 MFI just triggered another 39.03 Note: 2018 had bullish divergence on the proceeding 2 weeks after 39.44 reading printed. - Average reading of 39.5125 over the years
INDEX:BTCUSD
by LiquidMafia
1
Double bottom 6h The NQ momentum looks to be slowing to the down side. I don't have a crystal ball so take it with a grain of salt. With the Money flow being really low on the 6h chart, the macd making a cross to the upside, I'm calling a long here or a lil lower after today's session to see where it lands. Small size maybe even micro. Stop is pretty obvious with prior low. If prior low breaks we go lower. If it holds we are bouncing. Double bottom here could be a bigger bounce. I know a lot of bears will try to claw me to pieces but it's oversold. Sure it can go lower so I'm looking for confirmation on the long before I take it. Would like to see some big 30min bull bars and some fast action to the upside to confirm it. Just watching to see what it does. If the low breaks I'm joining the bears to ride it as low as it wants to go. Thanks for reading just an idea. Let's see what happens. Happy trading and good luck.
CME_MINI:NQ1!Long
by Dohnutz
1
BTCUSD, 12k or 9.6k, volume profile and the bad news bearsVolume profile on INDEX:BTCUSD on monthly chart after cycle up in 2019 The high volume cluster at the bottom is obvious. The POC for the whole profile up to the current price today is in the 9.2k range. The edge of the high volume cluster is around 12k. There's plenty of liquidity gaps (fair value gaps, FVGs, whatever you like to call them) between here and there. Those gaps tend to get filled as supply and demand tends to equilibrium, as we're seeing now and profiting from. Shorters of the world, unite! Set your leverage right, TP at 12k, watch for a bounce, then long as we come back up to fill in the gaps some more.
INDEX:BTCUSDShort
by UnknownUnicorn17032407
6
MTF MFI filterHi, I am attempting to make a filter to be added to strategy that lets you know when the MFI it is in a downtrend or an uptrend, I think the code is 90% there but I am struggling on the last bit. I would like to have a user defined lookback that you can set and it works the average between them. then you use the current MTF MFI rading to decide if it it is lower than the average to decipher the MTF MFI trend. lookback. for example - /6 > MTF . Thanks for any assistance I will republish the script when finalized
FTX:BTCPERP
by Pipfiend
ETH heavily oversold at support and uptrend intersectionLooking at ETH on the daily (note the oscillator is MFI). First off, last time we were this oversold on volume was July and before that April - in both instances momentum flipped to the upside and price rallied over 100% before reaching a local top. Obviously things get overbought and oversold often, but when oversold at a support zone (purple lines), especially to this extent, we've seen a strong bounce and reversal. To take the pattern analysis one step further, assuming the broad market uptrend holds (white line), ETH is not only heavily oversold but currently trading at the intersection of that trendline and its high-volume support zone of ~$3k... this looks just like July when ETH kicked off a 4-month run to a new ATH. On the flip side it's possible we break through support downward here, which would generally invalidate the broad market bull trend.
COINBASE:ETHUSDLong
by kamburgey
1
ADA MFI oversold levels, fib levels and fractalToday MFI daily has reached the same oversold level as the bottom of July-September capitulation period. Fractal of July-September fall looks interestingly similar to the fall of September. Both drops reached the golden pocket fib levels of around 0.6 which is not surprising. Will ADA repeat the same story? Are there enough fundamental news coming up in the near future to compensate for the bearish price action of today after e-toro delisting it? I'm personally bullish on Cardano at these prices, but is not clear how long we will remain bearish in the short term. Are you accumulating or dropping the bag now?
Long
by TheTradingParrot
3