Money Flow Index + Alerts

The Money Flow Index + Alerts indicator provides a multi-timeframe volume-weighted momentum oscillator designed to identify overbought/oversold conditions and trend strength. By incorporating specific transition zones and visual cross markers, it assists traders in detecting potential trend reversals and consolidation periods with increased clarity.

Usage

The Usage section describes how the script can be used to analyze market momentum and volume flow.

• Overbought and Oversold Identification: The indicator plots the MFI line alongside horizontal levels at 80 (Overbought) and 20 (Oversold). When the MFI crosses these thresholds, visual circles appear (green for oversold, red for overbought) to signify potential exhaustion points.
• Trend Zones: The script utilizes 60 and 40 levels to categorize trend strength.
  • Strong Uptrend: If the MFI remains consistently above the 60 level, it indicates strong bullish momentum.
  • Strong Downtrend: If the MFI remains consistently below the 40 level, it indicates strong bearish momentum.
  • Transition Zone: The area between 40 and 60 serves as a neutral or "transition" zone. Prices often consolidate here, or the MFI may drop into this zone as a trend begins to lose momentum, signaling a potential exit or reversal.
• Multi-Timeframe (MTF) Analysis: Users can project MFI data from higher timeframes onto their current chart to gain a broader perspective on volume flow without switching tabs.

Details

The Money Flow Index (MFI) is a technical oscillator that uses both price and volume to measure buying and selling pressure. This specific implementation builds upon the core MFI logic by calculating the Money Flow Ratio—the ratio of positive money flow to negative money flow over a specified period.

The script includes a "Transition Zone" concept which treats the middle range of the oscillator as a pivot area for trend shifts. Unlike standard MFI implementations, this version highlights threshold crossovers with specific plot styles to prevent visual ambiguity caused by chart scaling. It is based on the logic originally developed by Beasley Savage.

Settings

• Length: Sets the lookback period for the MFI calculation (default is 14).
• Oversold: Defines the lower threshold level for oversold conditions (default is 20).
• Overbought: Defines the upper threshold level for overbought conditions (default is 80).
• Use Current Chart Resolution?: When checked, the indicator uses the timeframe of the active chart.
• Custom Timeframe: If the current resolution box is unchecked, this input determines the specific timeframe (e.g., "240" for 4 hours) used for the MFI calculation.

FAQ

How can I interpret the circles on the MFI line? The circles appear when the MFI crosses the overbought or oversold levels. A green circle indicates a cross into oversold territory, while a red circle indicates a cross into overbought territory.

What does it mean when the MFI is in the blue transition zone? The blue transition zone (40-60) suggests the market is in a state of consolidation or that a previous strong trend is beginning to weaken.

How do I get access to Money Flow Index + Alerts? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.