MFI analysis: Money Flow Ind - helping confirm bottom?
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To distract my attention and stop me FOMOing in I've been looking at some alternative indicators to see if there is any new information that can support my outlook (whilst trying to be objective).
Money Flow Index is essentially RSI (momentum) with Volume thrown in as I understand it (RSI does not include volume despite many pointing to it as a volume indicator!).
A few interesting observations:
- The indicator is EXCELLENT at identifying failing 'double tops'. RSI will show you the price movement but without volume it misleads you into thinking volume is there when it is not. Take a look at the daily and compare the RSI and MFI peaks.
- Conversely, RSI is better at predicting price. MFI looks like it will indicate what's ahead of you but perhaps does not relate as well to intraday.
- However, one potential benefit of MFI when day trading is that the RSI will often drop but the MFI will retain or rise indicating volume is constant / growing and price will rise inline with the MFI, the RSI lagging behind. This is particularly noticeable at bullish convergences.
- MFI is more pronounced than RSI, perhaps allowing for clearer trend analysis?
As for bottom spotting - I've used it to take a look at the recent lows combined with MACD. I've found it inconclusive thus far :( (sorry to dash your hopes).
- From what I have ascertained thus far it would suggest that we have not hit bottom yet (between the 8th and 18th). This is partly due to the trends becoming less acute as we move towards a reversal. I've marked a number of similarities on the Daily chart.
- It does indicate a drop to my mid term prediction that relates to another idea (50% drop targets for each correction) to reach my $5,800 mark. This suggests that we are not in an inverse H&S pattern rather the left shoulder prior to a drop. I think I'm struggling to be objective through and with the shifting market sentiment I don't think this is viable right now but watching volume and this might be achieved if ALTs keep sucking up the investment.
If anyone has some experience / advice / warnings about the MFI I'd be interested.
Best, Hard Forky (I gave myself a 'Avatar'.. which is a fork, from IKEA)
Money Flow Index is essentially RSI (momentum) with Volume thrown in as I understand it (RSI does not include volume despite many pointing to it as a volume indicator!).
A few interesting observations:
- The indicator is EXCELLENT at identifying failing 'double tops'. RSI will show you the price movement but without volume it misleads you into thinking volume is there when it is not. Take a look at the daily and compare the RSI and MFI peaks.
- Conversely, RSI is better at predicting price. MFI looks like it will indicate what's ahead of you but perhaps does not relate as well to intraday.
- However, one potential benefit of MFI when day trading is that the RSI will often drop but the MFI will retain or rise indicating volume is constant / growing and price will rise inline with the MFI, the RSI lagging behind. This is particularly noticeable at bullish convergences.
- MFI is more pronounced than RSI, perhaps allowing for clearer trend analysis?
As for bottom spotting - I've used it to take a look at the recent lows combined with MACD. I've found it inconclusive thus far :( (sorry to dash your hopes).
- From what I have ascertained thus far it would suggest that we have not hit bottom yet (between the 8th and 18th). This is partly due to the trends becoming less acute as we move towards a reversal. I've marked a number of similarities on the Daily chart.
- It does indicate a drop to my mid term prediction that relates to another idea (50% drop targets for each correction) to reach my $5,800 mark. This suggests that we are not in an inverse H&S pattern rather the left shoulder prior to a drop. I think I'm struggling to be objective through and with the shifting market sentiment I don't think this is viable right now but watching volume and this might be achieved if ALTs keep sucking up the investment.
If anyone has some experience / advice / warnings about the MFI I'd be interested.
Best, Hard Forky (I gave myself a 'Avatar'.. which is a fork, from IKEA)
Ghi chú
Ignore the E123, they were / are short term buy areas.
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