Market Facilitation Index

The assumption inherent in this indicator is that as volume increases (or decreases) then it is a sign that demand is increasing (or decreasing) and hence the price will increase (or decrease). The aim of this indicator is to, therefore, identify when volume is increasing or decreasing.


Calculation

=Highest Bar Price – Lowest Bar Price
Volume

Signals

  • Index Up, Volume Up (Green) = Number of traders in the market has increased and the new players are opening positions in the direction of the trend. Hence the movement will pick up and so will the price = Buy.
  • Index Down, Volume Down (Fade) = Traders are no longer interested in the instrument and hence they are exiting the market resulting in a decreasing price = Sell.
  • Index Up, Volume Down (Fake) = The instrument price is not supported by the traders and hence the price will change soon.
  • Index Down, Volume Up (Squat) = There is a battle between buyers and sellers, leading to a low movement in price. Eventually the buyers or sellers will win the battle and the trend will go with them.

Green = Green LineFade = Brown LineFake = Blue LineSquat = Pink Line