Market Facilitation Index

Market Facilitation Index (BW MFI)

The Market Facilitation Index, developed by Bill Williams, shows the change of price for one tick. The absolute values of the indicator mean nothing on their own; only its changes matter. Bill Williams stresses the interplay between the changes in MFI and in volume.

Bar Colors

Each bar gets one of four colors, depending on how MFI and volume changed compared with the previous bar:

• Green (MFI up, volume up): more traders enter the market and the price moves in their direction. Trade in the direction of the move.
• Brown, “fade” (MFI down, volume down): the market loses interest. This often happens at the end of a trend.
• Blue, “fake” (MFI up, volume down): the move is not supported by volume and may be a false move.
• Pink, “squat” (MFI down, volume up): a fight between Bulls and Bears with a lot of volume but little price movement. A breakout often follows, which can be a trend reversal.

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BW MFI GreenFadeFakeSquat EURUSD · H1

The bar colours combine the change in MFI and in tick volume: green, fade, fake and squat.

Calculation of Market Facilitation Index

BW MFI = (HIGH - LOW) / VOLUME

Where:

• HIGH and LOW are the high and low of the bar;
• VOLUME is the (tick) volume of the bar.