The intensity with which money is invested in or withdrawn from an asset.
The appearance of the indicator.
MFI is a classic tool for measuring the speed of price movement. The difference between the version and SpreadFighter is that the user can independently select the data source for calculating the indicator. Below is the algorithm of MFI calculation.
Calculation of a typical price:
$$ MA_t = \frac{ \sum_{i=0}^{n-1} C_{t-i} }{n} $$
$$ TP_t=\frac{H_t+L_t+C_t}{3} $$
where: - $TP_t$ - typical price, - $H_t$ - candle maximum, - $L_t$ - candle minimum, - $C_t$ - closing price.Calculation of cash flow:
$$ MF_t=TP_t×V_t $$
Where: - $MF_t$ - cash flow, - $V_t$ - data source (volume by default).
Definition of positive and negative cash flow:
If $TP_t>TP_{t−1}$:
$$ PMF_t = \sum_{i=0}^{n-1}MF_{t-i} $$
If $TP_t<TP_{t−1}$:
$$ NMF_t = \sum_{i=0}^{n-1}MF_{t-i} $$
Where: - $PMF_t$ is positive cash flow, - $NMF_t$ is negative cash flow, - $n$ is the number of periods.
Calculation of cash flow ratio:
$$ MFR_t=\frac{PMF_t}{NMF_t} $$
Where: - $MFR_t$ is the cash flow ratio.