Money Flow Index (MFI): the volume-weighted RSI

The Money Flow Index (MFI) is an oscillator from 0 to 100 that measures buying and selling pressure using both price and volume. It is often called the volume-weighted RSI: like the RSI it compares "up" periods with "down" periods over a 14-bar window, but each period is weighted by its dollar volume, so a rally on heavy trading counts for more than a drift higher on light trading. Gene Quong and Avrum Soudack introduced it in 1989.

Because it adds volume, the MFI can disagree with the RSI, and those disagreements are the reason to use it. This guide calculates the MFI by hand from Starbucks' data, compares it with the RSI over a real year, and covers how Finabase computes it.

How money flow works

Each day gets a single representative price, the typical price, the average of its high, low and close. Multiply it by the day's volume and you have the day's raw money flow, roughly the dollar value traded.

Then sort the days. If today's typical price is higher than yesterday's, today's money flow is positive; if lower, negative. Over the last 14 days, add up each group. The ratio of positive to negative flow is the money ratio, and the MFI turns it into a 0–100 scale exactly as the RSI turns average gains and losses into one.

Two differences from the RSI matter:

• Volume weighting. A day with three times the usual volume counts three times as much.
• Plain sums, no smoothing. The MFI uses straight 14-day totals. A big day leaves the window abruptly 14 days later.

The formula

A worked example on Starbucks

On October 29, 2026, Starbucks (SBUX) closed at $105.51. Over the 14 sessions ending that day, its typical price rose on 12 days and fell on 2. Summing raw money flow from Finabase's bars:

Finabase's chart shows 87.51, one of only two readings above 80 in Starbucks' year. The RSI (14) that day was 70.8. The MFI was higher because the up days came on more volume than the down days.

MFI versus RSI on a real chart: Starbucks 2025–2026

Starbucks rose from $83.15 to $105.51 over the year, about 27%, after a low of $77.99 in November 2025 and a high of $110.51 in August 2026.

Extremes were rare at 80/20. The MFI was above 80 on only 2 sessions and below 20 on 4. The RSI was above 70 on 4 and below 30 on 8.

The September low. On September 18, 2026, Starbucks fell to $95.83 on 13.1 million shares, more than double the volume of a week earlier, and the MFI dropped to 15.7, its lowest of the year, with the RSI at 28.8. Twenty sessions later the stock was 1.8% higher, and by late October it was above $103. The volume-weighted oversold reading was more extreme than the RSI's and marked the bottom of that pullback.

When MFI and RSI disagree. The widest gap of the year came on January 6, 2026: Starbucks had climbed to $89.46 and its RSI was 61.6, but its MFI was only 40.0, more than 21 points lower. The rise had come on lighter volume than the declines before it, the kind of divergence that is often read as weak participation. In this case it was not a warning: Starbucks kept climbing to $97.62 by January 23, when both indicators were above 70.

How traders use the MFI

Overbought and oversold at 80/20. Quong and Soudack suggested 80 and 20, with 90 and 10 as rarer extremes. As with any oscillator, readings at an extreme in a strong trend can persist.

Divergence. A new price high with a lower MFI high, or a new low with a higher MFI low. Because volume is included, MFI divergences are often described as showing whether "money" agrees with price.

Failure swings. The RSI's failure-swing patterns apply to the MFI as well: an MFI that falls below 20, bounces, fails to go back below 20 on the next dip and then breaks its bounce high.

Confirmation of volume breakouts. A breakout with a rising MFI has money flow behind it.

Pitfalls and limitations

Volume spikes. A single high-volume day can swing the MFI sharply on the way in and again 14 days later on the way out.

Typical price direction is binary. Like OBV, the day's whole flow is assigned to one side, however small the change in typical price.

Divergences mislead too. As Starbucks in January 2026 showed, weaker volume on a rally does not always mean the rally will fail.

Comparison table

See Relative Strength Index (RSI): how to read and use it, On-Balance Volume (OBV): reading volume flow and divergence and Chaikin Oscillator (ADOSC): accumulation/distribution momentum.

How Finabase calculates and scores the MFI

Finabase computes the MFI with TA-Lib's MFI function from each bar's high, low, close and volume. A new MFI study ("Money Flow") defaults to 14 periods and is drawn in its own panel with guide lines at 20, 50 and 80.

MFI (14) appears in the technical gauge on the symbol page with its latest value but carries no Buy or Sell rule, so it always counts as neutral there, unlike the RSI row, which flags readings above 70 and below 30. Read the 80/20 levels and the divergences with the RSI on the chart.

Frequently asked questions

What is the difference between MFI and RSI?

The MFI weights each period by its dollar volume and uses the typical price; the RSI uses closing prices only and smooths gains and losses. The MFI is therefore sensitive to how much trading accompanies each move.

What are good MFI levels?

80 and 20 are the standard overbought and oversold levels, with 90 and 10 as extremes. On Starbucks' 2026 chart, readings beyond 80 or 20 occurred on only six sessions.

Can the MFI be used for crypto?

Yes, if the volume data is reliable. Volume reporting varies more across crypto venues than across US stock exchanges, which can distort the MFI.

Summary

The Money Flow Index is an RSI built from dollar volume: it compares the money traded on up days with the money traded on down days over 14 sessions. On Starbucks' chart it marked the September 2026 low with a more extreme reading than the RSI, and showed a large January gap with the RSI that turned out not to matter. Use it alongside the RSI to see whether volume confirms momentum.