MetaTrader Indicators

The market facilitation index (MFI), is created by Bill Williams, and attempts to determine the efficiency of price movement by quantifying the price movement per unit of volume. This is done by taking the day’s range high minus low and dividing it by the total volume.

• When the market facilitation index increases and volume increases:

a) The number of players coming into the market as well as volume increases.

b) Once there is a movement and its pick up has happened to speed things up, therefore as the new players start to open positions, the direction of bar then begins to develop.

• When the market facilitation index and volume decreases, this means that the market participants are not interested any more.
• When the market facilitation index increases its volume decreases. This means that it’s most likely that the market is not supported with the volume from clients and the price is changing due to traders’ that is dealers and brokers on the floor speculations.
• When the market facilitation index decreases, the volume also increases then there is a clash between bulls and bears. These are characterized by a large sell and buy volume, but the no considerable change in the price, since the forces are equal. Any one of the contending parties that is buyers or sellers will eventually win the battle. The break of such a bar lets you know that if this bar determines the trend annuls or the continuation of the trend, such bar is known as curtsying and Bill Williams was the person to name it.

Calculation

For calculating the MFI, you need to minus the lowest bar price from the highest bar price and then divide it by the volume. The formula is to find out BW MFI as follows:

BW MFI =Range x (High - Low)/Volume