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Indicators
The Money Flow Index
Take RSI and add volume, and you get the MFI — a momentum gauge that asks not just whether price rose, but how much conviction was behind it.
NoVo Options Trading · 2026
The Money Flow Index (MFI) is often called "volume-weighted RSI." Like RSI, it's a 0-100 momentum oscillator flagging overbought (typically above 80) and oversold (below 20) conditions — but it incorporates volume, not just price. It measures the flow of money into and out of an asset.
What volume adds
By weighting price moves by volume, MFI distinguishes a rally on heavy participation (real money flowing in) from a drift on thin volume (weak, suspect). A price rise on low volume that fails to push MFI up is a warning the move lacks conviction. This is the same insight as OBV, packaged as a bounded oscillator.
Divergence is the strongest signal
MFI's most useful read is divergence: price makes a new high but MFI doesn't (money isn't following the price up — bearish), or price makes a new low but MFI holds (selling is drying up — bullish). Because it captures volume, MFI divergence can be an earlier, more meaningful tell than price-only oscillator divergence.
When price makes a new high but the money flow doesn't follow, the rally is running on fumes.
Using it
Like every oscillator, MFI's overbought/oversold levels are traps in strong trends — it can pin high while price climbs. Its edge is the volume dimension: use it to judge whether a move has real participation behind it and to spot divergences, alongside price structure and regime. One input, weighed with the rest.
More on this: The Chaikin Money Flow (CMF), Explained · What Is an Index Option?
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NoVo is a software tool for market analysis and for executing trades you initiate, not financial advice. This article is general education, not investment advice. Options trading involves substantial risk of loss, up to and including your entire capital. NoVo makes no guarantee of profit, win rate, or performance, and past results do not predict future outcomes. You are responsible for your own broker account, configuration, and trading decisions.