Market Facilitation Index Indicator - Bill Williams MFI
Market Facilitation Index Definition
Market facilitation index is the indicator which evaluates the willingness of the market to move the price. The indicator's absolute values alone cannot provide any trading signals unlike it's dynamics in relation to the dynamics of the volume.
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How to Use Market Facilitation Index
The absolute values of the Market Facilitation index are represented by the histogram's bars while the comparison of the index and volume dynamics are given in colors which are vital in terms of reading the indicator signs.
- Green bar - both MFI and volume are up. Increasing trading activity means market movement acceleration. We may join the trend.
- Blue bar - MFI indicator is up, volume is down. The movement is continuing although the volume has dropped. The trend will soon be reversing.
- Pink bar - MFI indicator is down, volume is up. The slowing down movement while volume is raising may indicate a possible break through, often a U-turn.
- Brown bar - both MFI and volume are down. The market is no longer interested in the current direction and is looking for signs of a future development.
Market Facilitation Index (BW MFI)
Market Facilitation Index Formula (Calculation)
The Market Facilitation index is calculated as the difference between the high and low bar prices divided by the volume for that period.
BW MFI = (HIGH-LOW)/VOLUME
How to use Market Facilitation Index Indicator in trading platform
Use indicators after downloading one of the trading platforms, offered by IFC Markets.