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Market Facilitation Index
MetaStock Indicator
The following formulas were constructed using interpretation from
Technical Analysis of Stocks & Commodities Magazine June
1994, article "The Market Facilitation Index", by Gary Hoover.
"Applying technical analysis to developing trading signals begins
with the investigation of price movement and often incorporates
volume studies to improve trading accuracy. The Market Facilitation
Index (MFI) is one indicator that synthesizes both price and volume
analysis. The MFI is the ratio of the current bar's range (high-low)
to the bar's volume.
The MFI is designed to gauge the efficiency of price movement. The
efficiency is measured by comparing the current bar's MFI value to
the previous bar's MFI value. If the MFI increased, then the market
is facilitating trade and is more efficient, implying that the
market is trending. If the MFI decreased, then the market is
becoming less efficient, which may indicate a trading range is
developing that may be a trend reversal…."
-- Taken from Stocks & Commodities, V. 12:6 (253-254): The Market
Facilitation Index by Gary Hoover.
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| Range: High-Low |
| MFI: Fml("Range") /
Volume |
Efficiency:
If(Fml("MFI"),>,Ref(Fml("MFI"),-1),1, If(Fml("MFI"),<,Ref(Fml("MFI"),-1),-1,
If(Fml("MFI"),=,Ref(Fml("MFI"),-1),0,0))) |
Where:
+1 = increase
-1 = decrease
0 = unchanged |
Market Facilitation
Comparison:
If(V,>,Ref(V,-1),If(Fml("MFI"),>,Ref(Fml("MFI"),-1)
,1,If(Fml("MFI"),<,Ref(Fml("MFI"),-1),2,0)),If(V,< ,Ref(V,-1),If(Fml("MFI"),>,Ref(Fml("MFI"),-1),3,If(
Fml("MFI"),<,Ref(Fml("MFI"),-1),4,0)),0)) |
Where:
1 = +,+
2 = +,-
3 = -,+
4 = -,- |
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