The MFI (Money Flow Index) is a technical indicator used to analyze price and volume movements together to determine the strength of money flow in and out of an asset. It is similar to the RSI indicator but also takes volume into account.
Here’s how to use the MFI indicator on the Binance platform for day trading:
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1. Adding the indicator to the chart:
Open the Binance platform and select the currency you want to analyze.
Click on "TradingView" on the chart.
From the top, select "Indicators" and search for "Money Flow Index" then click on it to add it.
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2. MFI Settings (default):
The common time period is 14 days or 14 candles (can be adjusted according to your strategy).
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3. How to read MFI:
Above 80 = Overbought zone → the price may be about to drop.
Below 20 = Oversold zone → the price may be about to rise.
The area between 20-80 → Normal movement.
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4. Entry and exit signals:
Buy signal:
MFI below 20 then starts to rise.
It is preferable to confirm the signal with other indicators like RSI or reversal candles.
Sell signal:
MFI above 80 then starts to drop.
Also, it is preferable to have another confirmation (like EMA crossover or reversal candle).
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5. Quick strategy using MFI + RSI or MACD:
Trade on a 15-minute or 1-hour frame.
Enter a buy position when:
MFI is below 20 and starts to rise.
RSI is below 30 and starts to rise or MACD gives a positive crossover.
Enter a sell position when:
MFI is above 80 and starts to drop.
RSI is above 70 or MACD gives a negative crossover.