Charting
and Historical Backtesting Software by Ashkon Technology LLC
Interpretation:
Money flow index above
80
usually shows that the security is overbought and the price is likely to
fall down.
Money flow index below
20 usually shows that the security is oversold and a reverse
trend may be expected.
The divergence
between the indicator and the price usually signals that a reversal of the
price trend is expected.
Calculation:
Parameters: n - number of days
Notes:
Money Flow Index is measuring the strength of money flowing in and out
from stock but compared with Relative Strength Index
it incorporates volume of the trades.
