Money Flow Index
An oscillator bounded 0 to 100 that applies the RSI calculation to price multiplied by volume rather than to price alone.
Formula
MFI = 100 - 100 / (1 + Money Flow Ratio), where the ratio is Positive Money Flow / Negative Money Flow over n periods and Money Flow = Typical Price x Volume
Unit
ratio (x, times)
In depth
MFI is often called a volume-weighted RSI, and the description is accurate: the arithmetic is identical except that each period's contribution is scaled by the rupee value traded. This means a large move on thin volume counts for less than the same move on heavy volume, which is a defensible refinement. It carries the same conventional thresholds as RSI at 80 and 20, and the same caution: a strongly trending security can hold at an extreme for a long time. No reversal is predicted here by any reading.
Worked example
Over 14 periods positive money flow is ₹45 crore and negative money flow ₹15 crore, a ratio of 3. MFI = 100 - 100 / 4 = 75 — below the conventional 80 threshold despite a three-to-one imbalance.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Money Flow Index” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.