Market Facilitation Index

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    A technical indicator developed by Dr. Bill Williams to evaluate the efficiency of the price movement. An efficient market is defined as a market when all traders (long-term and short-term) are actively trading.  The indicator combines price and volume:

    MFI = (High – Low) * Volume

    There are 4 combinations:

    • MFI Up and Volume Up (Green): Follow the direction of the market.  The market is accelerating as more traders enter the market in the established direction.
    • MFI Down and Volume Down (Brown): Both MFI and Volume fade, resulting in no interest to advance further.
    • MFI Up and Volume Down (Blue):  Price movement without volume confirmation.  It is a fake move.
    • MFI Down and Volume Up (Pink): The most important signal.  The increased volume signifies the increased number of participants entering the market.  The squat as Bill Williams named it, implies a reversal or continuation of the prevailing trend.
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