What is MFI (Money Flow Index)?
Money Flow Index incorporates volume into up/down close pressure — 0–100 scale.
Formula
Above 80 = overbought; Below 20 = oversold
Indian market context (NSE)
Reference levels: Nifty 50 at 24,300, Reliance Industries at ₹1,300, Bank Nifty futures at 55,000 (lot size 30). Examples below show how MFI (Money Flow Index) shows up on Indian index, equity, and futures books — update to live quotes in your journal.
Nifty 50 perspective
MFI on Nifty (24,300): on the 15-minute chart, combine with session VWAP and 9:15–10:00 liquidity — index mfi signals misfire on expiry Tuesdays without volume confirmation.
Reliance Industries perspective
MFI on Reliance at ₹1,300: daily vs hourly settings diverge around results and ex-dividend dates; note corporate events in journal when mfi readings spike.
Bank Nifty futures perspective
MFI on Bank Nifty futures (55,000): first-hour signals differ from post-14:30 behaviour; avoid standalone entries when banking names lead the move.
How to validate
- Forward-test MFI (Money Flow Index) on paper or sim for two weeks after rule changes.
- Validate only on trades where MFI (Money Flow Index) settings matched the written playbook.
- Split results by trending vs range weeks on Nifty before trusting the signal.
- Require higher-timeframe bias agreement if that is part of your rule.
How to track in TradeLyser
- Add MFI (Money Flow Index) reading to trade entry notes (value + timeframe).
- Create tags: “MFI (Money Flow Index) aligned” / “MFI (Money Flow Index) ignored”.
- Monthly: filter trades by alignment tag and compare win rate and avg R.
- Screenshot chart context for mentor review on disputed trades.
Best practices
- Combine MFI (Money Flow Index) with higher-timeframe bias — not as a lone trigger.
- Avoid curve-fitting settings on less than three months of tagged data.
- Refresh playbook screenshots when changing MFI (Money Flow Index) parameters.
- Skip trading when MFI (Money Flow Index) conflicts with written risk limits.
Common pitfalls
- Treating MFI (Money Flow Index) as a guaranteed reversal signal.
- Optimising parameters on one bullish month only.
- Trading against higher-timeframe bias because MFI (Money Flow Index) “said so”.
- Failing to log when you overrode MFI (Money Flow Index) discretionally.
How to use this in TradeLyser
Related terms
Chaikin Money Flow sums money flow volume over period divided by total volume.
On-Balance Volume adds volume on up closes and subtracts on down closes — running total.
Relative Strength Index compares average gains to average losses over a lookback (commonly 14). Readings above 70 and below 30 are traditional extreme zones — not automatic reversal signals.
Volume is the number of shares or contracts traded. Rising price on rising volume suggests conviction; thin volume breakouts fail more often.
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