Indicators: Market Facilitation Index (BW MFI)

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Market Facilitation Index (BW MFI):

Market Facilitation Index technical indicator (BW MFI) is the indicator which shows the change of price for one tick.

Absolute values of the indicator do not mean anything as they are, only indicator changes have sense. Bill Williams emphasizes the interchanging of MFI and volume:

  • Market Facilitation Index increases and volume increases - this points out that:
    a) the number of players coming into the market increases (volume increases);
    b) the new coming players open positions in the direction of bar development, i.e., the movement has begun and picks up speed.
  • Market Facilitation Index falls and volume falls. It means the market participants are not interested anymore;
  • Market Facilitation Index increases, but the volume falls. It is most likely, that the market is not supported with the volume from clients, and the price is changing due to traders (brokers and dealers) "on the floor" speculations;
  • Market Facilitation Index falls, but the volume increases. There is a battle between bulls and bears, characterized by a large sell and buy volume, but the price is not changing significantly since the forces are equal. One of the contending parties (buyers vs. sellers) will eventually win the battle. Usually, the break of such a bar lets you know if this bar determines the continuation of the trend or annuls the trend. Bill Williams calls such bar "curtsying".

    Market Facilitaion Index indicator

Author: MetaQuotes Software Corp.

 
Wonderful indicator. But there is an error in the default colours. Red and blue colours of the histogram should be swapped. "Squat" bars are blue, and "fake" bars are red. This is how it is written by the author of the strategy Bill Williams. I appeal to Metaquotes - please change it.
 

Good afternoon, I am not a programmer, but one of my friends claims that in the code of the indicator Market FacilitationIndex (BW MFI) calculations are not strictly according to the classical formula:BW MFI = (HIGH - LOW) / VOLUME and additionally some other data correction is used. Which is in fact an error and accordingly the indicatordisplays incorrect data!

Could you please tell me how to correct this error in the indicator (remove additional data correction) and get
indicator working strictly according to the formula: BW MFI = (HIGH - LOW) / VOLUME ?????

 
Olexiy Polyakov:

Good afternoon, I am not a programmer, but one of my friends claims that in the code of the indicator Market FacilitationIndex (BW MFI) calculations are not strictly according to the classical formula:BW MFI = (HIGH - LOW) / VOLUME and additionally some other data correction is used. Which is in fact an error and accordingly the indicatordisplays incorrect data!

Could you please tell me how to correct this error in the indicator (remove additional data correction) and get
indicator working strictly according to the formula: BW MFI = (HIGH - LOW) / VOLUME ?????

The standard MB MFI indicator in MT is written with a gross violation of the essence of this indicator. The author uses a filter of 10% of MFI or volume deviation for calculation. This is not present in the built-in indicator.

I.e. if you open a weekly chart and on one bar the volume is 1'000'000, and on the next bar for example 1'000'001, the indicator will consider the second bar as "green" or "squatting" - nonsense!

I won't comment on "data correction", as I don't know what is meant by it.

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