Stocks & Commodities V. 33:10 (12–17): The Money Flow Oscillator by Vitali Apirine

The Money Flow Oscillator by Vitali Apirine

When is there more buying or selling pressure? Heres an indicator that answers that question.

There are indicators available to the technician that measure buying and selling pressure such as the money flow index (MFI), the Chaikin money flow indicator (CMF), and the moving average convergence/divergence (MACD). Each has its pros and cons, as all indicators do. After observing these indicators, I came up with an indicator that addresses some of the shortcomings of the existing indicators. I call this indicator the money flow oscillator (MFO), which is similar to the MFI, CMF, and MACD in that it measures buying and selling pressure but, as youll find out, its a little different. Thats not to say it doesnt have its share of drawbacks.

HERE'S WHAT IT DOES

The MFO measures the amount of MFO volume over a specific lookback period. The default lookback period is 20 but that can be changed based on your trading style. The resulting indicator fluctuates above or below the zero line, similar to the way an oscillator does...