Money flow index

The typical price for each day is the average of high price, the low price and the closing price.

${\displaystyle typical\ price={high+low+close \over 3}}$

The money flow for a certain day is typical price multiplied by volume on that day.

${\displaystyle money\ flow=typical\ price\times volume}$

The money flow is divided into positive and negative money flow.

• Positive money flow is calculated by adding the money flow of all the days where the typical price is higher than the previous day's typical price.
• Negative money flow is calculated by adding the money flow of all the days where the typical price is lower than the previous day's typical price.
• If typical price is unchanged then that day is discarded.

The money ratio is the ratio of positive money flow to negative money flow.

${\displaystyle money\ ratio={positive\ money\ flow \over negative\ money\ flow}}$

${\displaystyle MFI=100-{100 \over 1+money\ ratio}}$

The money flow index can be expressed equivalently as follows.

${\displaystyle MFI=100\times {positive\ money\ flow \over positive\ moneyflow+negative\ money\ flow}}$

This form more clearly shows what the MFI is a percentage of positive money flow to total money flow.