True MFI: A Volume-Based Alternative to the Standard Money Flow Index

Summary

True MFI is presented as an alternative to the standard Money Flow Index, motivated by the idea that increased trading activity can precede price moves. The description argues that conventional MFI relies on price in a way that makes it resemble RSI, while True MFI uses price to determine movement direction and volume to measure the amount of that movement. This separates directional information from activity magnitude.

The text says responsiveness improves on larger timeframes, but provides no formula, parameter settings, comparative study, or performance evidence with which to assess that claim. It notes that the indicator implementation depends on a smoothing-algorithm library and refers readers to a separate explanation of the underlying averaging approach. The document identifies the indicator's original publication date, but offers no guidance on signal thresholds, trading rules, or risk management; it should therefore be read as a conceptual description rather than a tested strategy.

Key ideas

• True MFI uses price to define direction and volume to quantify movement.\nIts motivation is that trading activity may increase before price changes.\nThe text describes the standard MFI as closely resembling RSI.\nThe author claims responsiveness improves on larger timeframes.\nNo formula, trading rules, or empirical performance evidence are supplied.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.