Money Flow Index, and the volume it cannot do without

What it means

Each bar's typical price — the average of its high, low and close — is multiplied by its volume to give a money flow. Flows on rising bars and falling bars are summed separately over fourteen bars and expressed as a 0-100 index.

It is RSI weighted by participation. Where RSI asks how one-sided recent movement was, this asks how one-sided it was once the size of each bar's trading is taken into account.

How we detect it

The engine surfaces it only when the index is at or above 80 near an important resistance zone, or at or below 20 near an important support zone — the same gate RSI and the stochastic are under.

Without volume there is no reading. A feed reporting zero volume makes every flow zero, and the index would look like a number while measuring nothing, so the engine refuses instead.

When the read carries information

• Volume is real and comparable bar to bar.
• Price is genuinely at a zone, so an extreme reading is a statement about something.

When it misleads

• In a sustained trend the index pins at an extreme for many bars, as every oscillator does.
• One enormous bar distorts the flow sums for the whole fourteen-bar window.
• On instruments whose reported volume is unreliable, weighting by it makes the reading worse than the unweighted one.

How it reaches you

It sits where RSI sits in the analysis order: after zones, proximity and structure.

An extreme reading is never a reason to do anything on our surfaces.