Money Flow Index (MFI) is a Metatrader 5 forex indicator that gauges the rate at which money is pumped into a currency pair and then taken from it.
The indicator’s construction and reading is similar to those of the Relative Strength Index with the only alteration being that volume is key to the MFI.
When reading the Money Flow Index indicator, traders should consider the following points:
Divergences can occur between the indicator and price.
If this holds, and we see the MFI declining while price grows, a bearish reversal is imminent.
On the other hand, a rising MFI that meets a corresponding declining price, will yield a bullish reversal.
In addition, when the value of the MFI is over 80 or below 20, the market is said to be in a possible peak or trough respectively.
Download the “mfi.ex5” MT5 indicator
The EUR/CHF H4 chart below displays the Money Flow Index Metatrader 5 forex indicator in action.
Basic Trading Signals
Buy Signal: Go long when the dodger blue line of the Money Flow Index Metatrader 5 forex indicator rises above the 50.00 level.
Sell Signal: Go short when the dodger blue line of the Money Flow Index Metatrader 5 forex indicator dips below the 50.00 level.
Exit buy trade: Close all buy orders if while a bullish trend is ongoing, the dodger blue line of the Money Flow Index indicator falls below the 50.00 level.
Exit sell trade: Close all sell orders if while a bearish trend is ongoing, the dodger blue line of the Money Flow Index indicator breaks above the 50.00 level.
Tips: The Money Flow Index indicator shouldn’t be used as a standalone indicator, instead it should be added to trend following tools like the 200 SMA or 100 EMA.
Download the “mfi.ex5” Metatrader 5 indicator
MT5 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 5
Type: chart window indicator
Customization options: Variable (Period, Volumes), Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Copy and paste the mfi.ex5 indicator into the MQL5 indicators folder of the Metatrader 5 trading platform.
You can access this folder from the top menu as follows:
File > Open Data Folder > MQL5 > Indicators (paste here)