The Market Facilitation Index (MFI) is a volume-based indicator that helps forex traders evaluate market strength and price movement efficiency. In this guide, we’ll explore how MFI works, its advantages, and the best strategies to trade with it effectively.
The Market Facilitation Index (MFI) is a technical indicator developed by Bill Williams to measure how efficiently the market moves price based on volume changes. It helps traders determine market participation strength and potential trend changes.
The MFI formula is:
MFI = (High – Low) / Volume
Where:
Bill Williams classified MFI behavior into four different market conditions based on its correlation with volume:
MFI helps confirm trend strength based on volume participation:
Traders use MFI to detect fake breakouts and reversals:
Pairing MFI with a moving average (e.g., 50 EMA) helps filter trade signals:
✅ Pros:
❌ Cons:
The Market Facilitation Index (MFI) is a powerful volume-based tool that helps traders identify strong price movements, potential reversals, and market participation levels. When combined with moving averages or volume indicators, MFI enhances trade accuracy and decision-making.
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