What Is a Fund Flow?
The Money Flow Index (MFI) measures when funds are invested in securities and recovered from the securities market. Technical specifications of the rate.
Money Flow Index
- For the construction and interpretation of this indicator,
- The calculation method of the capital flow indicator includes several steps. First we need to define a typical price for the period of study. .
- TP = (HIGH + LOW + CLOSE) / 3
- Then we calculate the amount of money flow:
- MF = TP * VOLUME
- If the typical price of the day is higher than the typical price of yesterday, then the capital flow index should be a positive number. If today's typical price is lower than yesterday's typical price, then the index of capital flow should be a negative number.
- Positive capital flow is a sum of positive capital flow in a certain period of time. Negative capital flow is a sum of negative capital flow in a certain period of time.
- Then we calculate the money ratio (MR) and divide the positive money flow by the negative money flow:
- MR = Positive Money Flow (PMF) / Negative Money Flow (NMF)
- Finally, we use the capital ratio to calculate the capital flow index:
- MFI = 100-(100 / (1 + MR))