{"id":12220,"date":"2026-05-22T13:38:56","date_gmt":"2026-05-22T13:38:56","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/money-flow-index-mfi\/"},"modified":"2026-05-22T13:38:56","modified_gmt":"2026-05-22T13:38:56","slug":"money-flow-index-mfi","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/money-flow-index-mfi\/","title":{"rendered":"Money Flow Index (MFI)"},"content":{"rendered":"<p>The Money Flow <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/index\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Index<\/a>, or MFI, is a momentum indicator that adds <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/volume\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">volume<\/a> to the <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/rsi\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>RSI<\/a> concept. Like RSI it oscillates between 0 and 100, but instead of looking only at price moves, it asks how much volume flowed in on up-days versus down-days. The result is a more nuanced read on buying and selling pressure, used by Indian swing traders for <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/stocks\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">stocks<\/a> and indices.<\/p>\n<div><strong>Key takeaways:<\/strong>\n<ul>\n<li>MFI combines price and volume to gauge buying vs selling pressure.<\/li>\n<li>Range is 0&#x2013;100; above 80 = overbought, below 20 = oversold.<\/li>\n<li>Best used as confirmation alongside RSI, <a class=\"glossaryLink\"  href=\"https:\/\/lemonn.co.in\/blog\/glossary\/macd\/\"  data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]'  tabindex='0' role='link'>MACD<\/a> or price action.<\/li>\n<li>Divergence with price is the highest-quality MFI signal.<\/li>\n<li>Default period is 14; intraday traders may use 7&#x2013;10.<\/li>\n<\/ul>\n<\/div>\n<h2 id=\"how-mfi-is-calculated\">How MFI is calculated<\/h2>\n<p>For each period, compute the Typical Price ((H+L+C)\/3) and multiply by volume to get the &#x201C;Raw Money Flow&#x201D;. Compare it with the previous period: if today&#x2019;s typical price is higher, it is positive money flow; lower, negative. Sum positive and negative flows over N periods, take the ratio, and convert to a 0&#x2013;100 scale.<\/p>\n<h2 id=\"reading-mfi\">Reading MFI<\/h2>\n<ul>\n<li><strong>Above 80:<\/strong> Possible overbought &#x2014; selling pressure may emerge in a range-bound market.<\/li>\n<li><strong>Below 20:<\/strong> Possible oversold &#x2014; bounce candidate.<\/li>\n<li><strong>Divergence:<\/strong> MFI failing to confirm a new price high or low signals momentum exhaustion.<\/li>\n<li><strong>Trend confirmation:<\/strong> Rising MFI alongside rising price confirms healthy participation.<\/li>\n<\/ul>\n<h2 id=\"mfi-vs-rsi\">MFI vs RSI<\/h2>\n<p>RSI is based purely on closing prices. MFI adds volume to the equation. In strong trends with rising volume, MFI tends to rise faster than RSI; in weak trends, it lags. Many traders display both and trade only when they agree.<\/p>\n<h2 id=\"practical-example\">Practical example<\/h2>\n<p>A mid-cap stock breaks above resistance with volume; MFI also rises decisively above 50. The breakout is confirmed by money-flow participation. If the same breakout happens with MFI falling, the move is suspect and worth fading or avoiding.<\/p>\n<h2 id=\"limitations\">Limitations<\/h2>\n<ul>\n<li>Volume data can be unreliable on small-caps and on the day before\/after corporate actions.<\/li>\n<li>In strong trends, MFI can stay above 80 (or below 20) for long periods.<\/li>\n<li>Single-day events (block deals, news) can spike MFI temporarily.<\/li>\n<\/ul>\n<h2 id=\"tips-for-indian-markets\">Tips for Indian markets<\/h2>\n<ol>\n<li>Apply MFI to liquid stocks and indices where volume data is meaningful.<\/li>\n<li>Combine with trend filters (<a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/moving-averages\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">moving averages<\/a>, ADX) before <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/trading\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">trading<\/a> reversals.<\/li>\n<li>Use weekly MFI to spot major accumulation or distribution phases in long-term holdings.<\/li>\n<li>Pair MFI divergence with candlestick reversal patterns for high-probability entries.<\/li>\n<\/ol>\n<h2 id=\"frequently-asked-questions\">Frequently asked questions<\/h2>\n<div>\n<h3 id=\"is-mfi-better-than-rsi\">Is MFI better than RSI?<\/h3>\n<p>Neither is universally better. MFI adds volume context; RSI is simpler. Use both for confirmation when possible.<\/p>\n<h3 id=\"what-period-should-i-use-for-mfi\">What period should I use for MFI?<\/h3>\n<p>14 is default; shorten for intraday, lengthen for positional.<\/p>\n<h3 id=\"can-mfi-be-used-on-nifty\">Can MFI be used on <a class=\"glossaryLink\" href=\"https:\/\/lemonn.co.in\/blog\/glossary\/nifty\/\" data-gt-translate-attributes='[{\"attribute\":\"data-cmtooltip\", \"format\":\"html\"}]' tabindex=\"0\" role=\"link\">Nifty<\/a>?<\/h3>\n<p>Yes, but volume reflects futures activity. Most traders prefer MFI on individual stocks.<\/p>\n<h3 id=\"does-mfi-work-on-cryptocurrencies\">Does MFI work on cryptocurrencies?<\/h3>\n<p>Yes, MFI is generic and applies to any asset with volume data.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>The Money Flow Index, or MFI, is a momentum indicator that adds volume to the RSI concept. Like RSI it oscillates between 0 and 100, but instead of looking only at price moves, it asks how much volume flowed in on up-days versus down-days. The result is a more nuanced read on buying and selling [&#x2026;]<\/p>\n","protected":false},"author":3,"featured_media":0,"menu_order":0,"template":"","meta":{"_uag_custom_page_level_css":"","footnotes":""},"class_list":["post-12220","glossary","type-glossary","status-publish","hentry"],"blocksy_meta":[],"uagb_featured_image_src":{"full":false,"thumbnail":false,"medium":false,"medium_large":false,"large":false,"1536x1536":false,"2048x2048":false,"web-stories-poster-portrait":false,"web-stories-publisher-logo":false,"web-stories-thumbnail":false},"uagb_author_info":{"display_name":"Team Lemonn","author_link":"https:\/\/lemonn.co.in\/blog\/author\/ashu\/"},"uagb_comment_info":0,"uagb_excerpt":"The Money Flow Index, or MFI, is a momentum indicator that adds volume to the RSI concept. Like RSI it oscillates between 0 and 100, but instead of looking only at price moves, it asks how much volume flowed in on up-days versus down-days. The result is a more nuanced read on buying and selling&hellip;","_links":{"self":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary"}],"about":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/types\/glossary"}],"author":[{"embeddable":true,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/users\/3"}],"version-history":[{"count":0,"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/glossary\/12220\/revisions"}],"wp:attachment":[{"href":"https:\/\/lemonn.co.in\/blog\/wp-json\/wp\/v2\/media?parent=12220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}