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In the stock marketPlaylivecasinofreespinsInvestors always hope to have more information to judge the trend of stocks in order to make more informed investment decisions. Among them, the Capital flow Index (Money Flow Index,MFI) is a very important tool. It can help investors understand the buying and selling power of the market and predict the trend of stock prices.

What is MFI?

MFI is a momentum indicator, which combines the concepts of price and volume to measure the strength of buying and selling power. The calculation formula of MFI isPlaylivecasinofreespins:

MFI = 100,100 / (1 + MF)

Where MF (Money Flow) is the flow of funds, and the formula is:

MF = (buying amount-selling amount) / (buying amount + selling amount)

How to draw MFI?

The process of drawing MFI can be divided into the following steps:

Calculate the MF value of the day, accumulate the MF value, get the MF cumulative value, calculate the percentage of the MF cumulative value, get the MFI value, and draw the MFI value on the stock price chart.

MFI can be identified in the following ways:

The MFI value is greater than 80: it indicates that the buying force is very strong, there may be overbuying, and the price is at risk of a correction. The MFI value is less than 20: it indicates that the selling force is very strong, there may be overselling, and the price may rebound.

In addition, MFI can also be used in combination with other technical indicators, such as moving average, relative strength index (RSI), etc., to improve the accuracy of prediction.

Advantages and disadvantages of MFI

MFI is a very useful technical indicator, but it also has some limitations. Here are some of the advantages and disadvantages of MFI:

Advantages and disadvantages combine the concept of price and trading volume, which can reflect the strength of buying and selling power, which requires a certain amount of calculation, which may increase the burden on investors, help investors identify the lag of overbuying or overselling, and can not reflect changes in the market in real time. It can be used in combination with other technical indicators. To improve the accuracy of prediction, investors need to have certain knowledge of technical indicators.

In short, MFI is a very important technical indicator, which can help investors better understand market trends and make more informed investment decisions. However, investors also need to understand its limitations when using MFI, and make a comprehensive judgment combined with other technical indicators and market information.