Also known as "the RSI that accounts for volume". MFI is an indicator that combines volume and price to carry out its analysis.
It is a momentum indicator and can also be considered as a volume one. It measures the flow of money into and out of an asset together with price changes to identify oversold and overbought zones.
Overbought zones are areas where the price and volume have risen a lot in a small interval of time. Then, suggesting that the price is overbought and that it can have a trend reversal or correction. Therefore, signaling sells.
Oversold zones are the opposite. They are areas where the price and volume have decreased suddenly. Usually, they are interpreted as buy points since the price is likely to gain bullish momentum after that fall.
What strategies does Bottrex provide for this indicator?
- Below Value: When the current value is below the value you set.
- Above Value: When the current value is above the value you defined.
- Ascending Crossing: When the current value crosses above the value you defined. Ex .: Current value at 30. If in the previous candle it was at 29, then it went up and crossed the 30 and went to 31, it can mean an entry. This option comes with a safety limiter not to buy when the current value of the indicator is above its value + 10, example: if you set the value to 30, your safety limit will be 40 and the robot will only order if the value current is below 40.
- Downward Crossing: When the current value crosses below the value you defined. Ex .: Current value at 30. If the previous candle was at 31, then it went down and crossed the 30 and went to 29, it can mean an entry.