V.12:8 (321-324): SIDEBAR: The Money Flow Index

How to calculate the money flow index, a volume-weighted form of the RSI.

The money flow index (MFI) is a volume-weighted form of the relative strength index (RSI). Instead of using up closes versus down closes, the MFI compares today's average price to yesterday's average price and then weighs the average price by volume to calculate money flow (MF). The ratio of the summed positive and negative money flows are then normalized to be on a scale of zero to 100.

The following are steps with which to build a 14-period MFI, using as an example the price data for Boeing (BA).

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