MARKET FACILITATION INDEX
Market facilitation index is an indicator that aims to assess the ability and willingness of the market to move a price. However, its absolute values are not capable of releasing trading signals compared to its dynamics with relevance to the dynamics of the volume.
GREEN BAR- MFI and volume are both up. And that an active trading activity denotes that market movement is accelerating. If this is the case, it is ideal for participating in the current trend.
BLUE BAR-This indicates that while the MFI is up, the volume is down. Though the current trend is progressing, the volume dropped, indicating that the current trend will reverse anytime soon.
PINK BAR-This means that the MFI indicator is down, and the volume is up. The gradual movement as volume rises denotes that a breakthrough is about to happen. Commonly, such a breakthrough is U-turn.
BROWN BAR- This denotes that both MFI and volume are down. The market is hesitant to pursue the current direction and is waiting for signals that will develop new trends.
MARKET FACILITATION INDEX FORMULA
High and low bar prices must be subtracted to each other, and the answer should be divided into a volume to compute MFI.
BW MFI= (HIGH-LOW)/VOLUME