MFI Divergence Indicator

20 thg 12, 2021

Our Developer Malin converted the built-in RSI divergence indicator to MFI (Money Flow Index).

How to apply?

Notice 1: MFI, unlike the RSI, incorporates volume. It thus is an indicator of a higher precision when it comes to finding the the moment to sell - or - the moment to enter.
Notice 2: In Ranging Markets MFI (and RSI) is a solid momentum indicator to buy or sell. The asset displayed shows a slight markdown. Thus, we are looking primarily for short positions. Once can tell by us omitting the first 2 hidden bearish divergence signals and then entering the market.
Notice 3: Divergences depend on pivot points. The drawback with pivot points is that it is a lagging indication of a potential reversal. The more time (bars) one takes to confirm a reversal the less profitable is the trade - but less risky. In the charts one can tell that we enter the market 5 bars later. Usually that is not the tip of the reversal.

Notice 4: One must adapt the left and right periods of the indicator to risk/reward ratio, length of swing / frequency modulation and volatility of the price action.

Credits: Credits go to the Tradingview Team for delivering the original code. And Malin for the conversion. Please keep the copy right as a courtesy.

22 thg 12, 2021

Phát hành các Ghi chú

We added the RSI in light blue to the indicator to understand the difference better. Notice, a big difference of the MFI an RSI is indicating that there is a considerable difference of price and the volume that is backing up the direction of the trend. We will indicate significant differences in future versions.

22 thg 12, 2021

Phát hành các Ghi chú

Indicating a MFI/RSI-difference of 20% on the chart.

22 thg 12, 2021

Phát hành các Ghi chú

Indicating any difference of the MFI and RSI. No matter if positive or negative.