The Money Flow Index sorts each session’s dollar volume by the direction of its typical price and shows the 14-session balance on a 0 to 100 scale. It describes recent volume-weighted pressure; it does not forecast the next move.
What the Money Flow Index measures
The Money Flow Index (MFI) is a momentum oscillator that adds volume to price. Gene Quong and Avrum Soudack described it in 1989 as a volume-weighted version of RSI. For each session it asks whether the typical price rose or fell and weighs the answer by the session’s dollar volume. The result moves between 0 and 100 and shows how the recent flow divides between rising and falling sessions.
- Inputs: the high, low, close and volume of every session.
- Lookback: 14 sessions is the usual setting, so the first value needs 15 sessions, one base session plus 14 comparisons.
- Units: index points from 0 to 100; a reading carries no dollar or share unit.
- Cadence: on a daily chart each period is one session; on a weekly chart the same formula counts weeks.
Typical price and raw money flow
The calculation starts from the typical price, the average of a session’s high, low and close. Multiplying it by volume gives raw money flow, a rough dollar value of the shares traded. The typical price also decides the side: a session whose typical price is above the previous session’s counts as positive flow, and one below counts as negative flow.
Typical price = (High + Low + Close) / 3
Raw money flow = Typical price × Volume
Positive flow: typical price above the previous session’s typical price
Negative flow: typical price below the previous session’s typical priceHigh, Low, Close- the session’s highest, lowest and last traded prices, in dollars
Volume- the number of shares traded in the session
A session whose typical price equals the previous one belongs to neither side. Its volume drops out of the calculation entirely, which is one way the MFI differs from a plain volume total.
How to calculate a 14-session MFI
Add the positive flows of the last 14 sessions and, separately, the negative flows. Their ratio is the money ratio, and the index rescales it to the range from 0 to 100. The table works through 15 hypothetical sessions: session 0 is the base that session 1 is compared with, and sessions 1 to 14 form the window.
Positive money flow = sum of positive raw money flow over 14 sessions
Negative money flow = sum of negative raw money flow over 14 sessions
Money ratio = Positive money flow / Negative money flow
MFI = 100 − 100 / (1 + Money ratio) = 100 × Positive / (Positive + Negative)| Session | High ($) | Low ($) | Close ($) | Volume (thousand shares) | Typical price ($) | Raw money flow ($ thousand) | Flow |
|---|---|---|---|---|---|---|---|
| 0 | 50.60 | 49.70 | 50.21 | 1,100 | 50.17 | 55,187 | Base session |
| 1 | 51.20 | 50.10 | 51.01 | 1,400 | 50.77 | 71,078 | Positive |
| 2 | 51.60 | 50.70 | 51.30 | 1,300 | 51.20 | 66,560 | Positive |
| 3 | 51.40 | 50.40 | 50.60 | 1,700 | 50.80 | 86,360 | Negative |
| 4 | 51.00 | 50.10 | 50.91 | 1,000 | 50.67 | 50,670 | Negative |
| 5 | 51.20 | 49.90 | 50.91 | 900 | 50.67 | 45,603 | Unchanged, left out |
| 6 | 52.00 | 50.90 | 51.81 | 1,600 | 51.57 | 82,512 | Positive |
| 7 | 52.60 | 51.50 | 52.41 | 1,800 | 52.17 | 93,906 | Positive |
| 8 | 52.50 | 51.60 | 51.90 | 1,200 | 52.00 | 62,400 | Negative |
| 9 | 52.20 | 51.00 | 51.30 | 1,500 | 51.50 | 77,250 | Negative |
| 10 | 52.00 | 51.10 | 51.79 | 1,100 | 51.63 | 56,793 | Positive |
| 11 | 52.90 | 51.70 | 52.69 | 1,900 | 52.43 | 99,617 | Positive |
| 12 | 53.10 | 52.20 | 52.50 | 1,300 | 52.60 | 68,380 | Positive |
| 13 | 52.80 | 51.60 | 51.81 | 1,600 | 52.07 | 83,312 | Negative |
| 14 | 53.00 | 51.70 | 52.80 | 1,700 | 52.50 | 89,250 | Positive |
| Step | Value |
|---|---|
| Positive money flow ($ thousand) | 628,096 |
| Negative money flow ($ thousand) | 359,992 |
| Money ratio | 1.745 |
| MFI | 63.57 |
Eight sessions add to the positive side and five to the negative side, while session 5 matches the typical price of session 4 and is left out. An MFI of 63.57 means that 63.57% of the counted money flow came on sessions with a rising typical price.
Two edge cases need care. If the negative sum is zero while the positive sum is not, the money ratio has no finite value, but the second form of the formula gives exactly 100; a window with only negative flow gives 0. If both sums are zero, for example when the typical price never changes over the window, the formula is 0 divided by 0 and defines no reading, so treat any number a chart prints there as a display convention rather than a measurement.
How to read the MFI on a stock chart
The MFI is drawn in its own pane below the price chart, on a fixed scale from 0 to 100. Many charts mark 80 and 20 as reference lines, and some analysts reserve 90 and 10 for rarer extremes. A reading above 80 says that most of the window’s money flow arrived on rising sessions; a reading below 20 says the opposite.
- Check the setting. A 14-session MFI and a 10-session MFI of the same stock can sit in different zones.
- Read the level against the price trend. In a strong advance the MFI can stay above 80 for weeks, so a high reading describes the advance rather than ending it.
- Watch the turns. A move back below 80 or back above 20 shows the balance of flow shifting, which is easier to judge than the level alone.
- Compare the indicator’s peaks and troughs with those of price, which is where divergences appear.
In the hypothetical chart on this page, the first advance carries heavy volume on its up sessions and lifts the MFI above 90. The second advance reaches a higher price on lighter up-session volume, and the MFI peaks near 68.
Bullish and bearish MFI divergences
A divergence is a disagreement between the direction of price and the direction of the indicator. A bearish divergence forms when price makes a higher high while the MFI makes a lower high: the second advance came with less volume-weighted support. A bullish divergence is the mirror image, a lower low in price with a higher low in the MFI, which shows selling flow fading even as price slips.
| Divergence | Price | MFI | What it describes |
|---|---|---|---|
| Bearish | Higher high | Lower high | Less money flow on the rising sessions of the second advance |
| Bullish | Lower low | Higher low | Less money flow on the falling sessions of the second decline |
A divergence describes a change in participation; it does not time a reversal. Prices can keep rising through several bearish divergences, and a divergence can disappear when a single heavy-volume session enters or leaves the 14-session window. Treat it as a reason to look more closely at the chart and the company.
MFI compared with raw volume and RSI
Raw volume counts shares traded but carries no direction: a heavy session can be a sharp rise or a sharp fall. The MFI assigns each session’s dollar volume to a side, so the same volume can push the index up or down. RSI, by contrast, uses only closing prices and the size of each change, with no volume at all.
| Measure | Inputs | Direction | Scale |
|---|---|---|---|
| Volume | Shares traded | None | Shares, no upper limit |
| RSI (14) | Closing prices | Size of each close-to-close change | 0 to 100 |
| MFI (14) | High, low, close and volume | Sign of each typical-price change, weighted by dollar volume | 0 to 100 |
Because the MFI weights by volume, it can disagree with RSI on the same chart: a run of small gains on heavy volume lifts the MFI more than RSI. Read more about RSI, on-balance volume and stock volume in context.
Limitations of the Money Flow Index
The MFI compresses a lot of information into one number, and several of its design choices can mislead. Knowing them helps you decide when a reading deserves weight.
- Direction, not size. A typical price that rises by one cent counts the whole session’s money flow as positive.
- Window effects. A heavy session affects the index for 14 sessions and then drops out at once, which can move the MFI on a quiet day.
- Event volume. Index rebalancing, option expirations and news days produce volume that may say little about lasting demand.
- Persistent extremes. In strong trends, readings above 80 or below 20 can last for weeks.
- Daily summaries. The typical price is a rough midpoint of the session, not the average price at which shares actually traded.
- Edge cases. When the typical price never changes over the window, the formula defines no reading, as described in the calculation section.
Checking the inputs in TradeClever
TradeClever does not plot the Money Flow Index. Its Stock Charts show daily candles, a volume pane and an RSI pane, which let you inspect the ingredients behind an MFI reading: whether rising sessions came with heavier volume than falling ones, and how a price-only oscillator compares. TradeClever works with daily session data, so every period in these calculations is one session.
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Sources
Read our data and methodology notes for calculation context. This guide explains research tools and observations. It does not recommend a trade or investment.