The Money Flow Index can be used as the basis of a successful trading strategy.
Trading Strategy Overview:
The Money Flow Index includes both price and volume in its calculation. If the average price for the day is higher than yesterday then the Money Flow is positive and added to the indicator, while if the average price is lower than yesterday the Money Flow is negative and subtracted from the indicator.
The exact calculation of the Money Flow Index is very similar to the calculation of the relative Strength Index (RSI) with volume included. The Money Flow Index will fluctuate between 0 and 100, but will never reach the extreme levels.