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I am in the process of developing a real-time tick by tick charting application for intra-day trading of equities. I would like to add money flow to the suite of indicators. I have noticed that there are several variations of moneyflow indicators. Does anyone know which is the best form of the moneyflow indicator and what the formula is. I would also appreciate an expanation why. Thank you in advance for your help in this matter.
Well, the money flow index formula requires some steps: 1) first, calculate the typical price, by adding today's high, low and close and dividing by three; 2) multiply the TP for today's volume: this gives you today's money flow (not MFI); 3) A 14 day MFI requires summing Positive Money Flow and Negative Money Flow in this period: in order to do this, consider respectively the days when typical price was up and days when TP was down (like the process involved in calculating relative strength in RSI calculation); 4) Next step is dividing the Positive Money Flow by the Negative Money Flow, thus having the Money Ratio (MR); 5) Finally, the Money Flow Index is calculated in this way: MFI=100-100/(1+MR).
Here is the Metastock for Dos formula:
MONEY FLOW INDEX
100-(100/(1+( sum(if(typ(),>,ref(typ(),-1),typ()*V,0),14) / sum(if(typ(), <,ref(typ(),-1),typ()*V,0),14))))
ciao
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%% Gaetano Arnaldo Evangelista - BARI (Italy) E-mail: ageitaly@xxxxxx URL: http://www.geocities.com/wallstreet/8492 %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
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