Money Flow Index
Money Flow Index is a technical indicator invented by Gene Quong and Avrum Soudack. It is similar to the Relative Strength Index (RSI) and fits into the momentum indicator category. Traders can use both volumes and prices of a given instrument to predict the trends and also to measure the strength of the money that goes into it and withdraws from it. Overbought/Oversold levels can be used to find potentials reversals. Calculation There are the following steps to calculate Money Flow Index:
Money Flow is positive when the typical price rises and negative when the typical price decline Signals Money Flow Index indicator’s chart has two horizontal lines that represent the 20% and 80% levels.
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