My Diary.
to Share my Life Events

How to use Money Flow Index (MFI) indicator to warn of unsustainable price extremes?

Money Flow Index (MFI) indicator is a momentum oscillator tied to volume. It is also known as a volume-weighted RSI because RSI formula is applied to create a volume-weighted indicator. Money Flow Index (MFI) is suited to identify reversals as it is interpreted similar to RSI.

You can look for overbought (above 80) or oversold(below 20) levels to warn of unsustainable price extremes. 

You can also check if a price move above 90 as and indicator as a  truly overbought and a move below 10 is truly oversold. Moves above 90 and below 10 are very rare and you should take action to buy or sell.

Admin Admin Author