Market Facilitation Index
Acceleration / Deceleration Oscillator | Market Facilitation Index |
Market Facilitation Index
Market facilitation index was created by Bill Williams. It shows the change of the price for one tick.
The increase of the indicator means that the number of players who open position in the direction of the trend is also rising.
The decrease of the indicator shows the volume fall. It means the market participants lack the interest.
The decrease of volume along with the growth of indicator's index is the sign that most likely the market is not supported with the volume from traders, and the price is changing due to brokers and dealers speculations.
The increase in volume along with the continuous drop of the index shows that there is a battle between bulls and bears, characterized by a large sell and buy volume, but the price is not changing significantly since the forces are equal. One of the parties usually wins the battle and it influences whether the trend will continue after this bar or the direction is going to change. This kind of bar is called "curtsying".
To calculate Market Facilitation Index you need to subtract the lowest bar price from the highest bar price and divide it by the volume.
BW MFI = (HIGH - LOW) / VOLUME
Where:
HIGH - maximum price of the current bar;
LOW - minimum price of the current bar;
VOLUME - current bar volume.
Similar information about indicators you can find in information system of trade platform MetaTrader 4 (Help-> Help Topics [F1] -> Ananlitics -> Technical Indicators).
