Market Facilitation Index

The Market Facilitation Index (BW MFI), is a technical indicator that shows the change of price for one tick. Absolute values of the indicator do not mean anything as they are, only indicator changes have sense. Market Facilitation Index is created and developed by Bill Williams. If the Market Facilitation Index increases and volume increases — this means that the number of players coming into the market increases (volume increases), the new coming players open positions in the direction of bar development, i.e., the movement has begun and picks up speed. If the indicator falls, then the volume falls. This means that the market participants are not interested anymore. If the Market Facilitation Index increases, but the volume falls probably points to that the market is not supported with the volume from clients, and the price is changing due to investors’ speculatins. And finally, if the indicator falls, but the volume increases, we may say that there is a battle between bulls and bears, characterized by a large sell and buy volume, but the price is not changing significantly since the forces are equal. One of the contending parties is likely to win the battle. Usually, the break of such bar lets you know if this bar determines the continuation of the trend or annuls the trend. Such bar is called curtsying.

Market_Facilitation_Index
Market Facilitation Index

The calculation of the Market Facilitation Index is the following: subtract the lowest bar price from the highest bar price and divide it by the volume -> BW MFI =RANGE*(HIGH-LOW)/VOLUME
Here range is the multiplication factor, which brings the difference in points down to whole numbers.

BW MFI can be used for all time frames from 5 minutes up to daily and weekly frames.
Current BW MFI has been coded for MetaTrader 4 platform. But it could also be used with other trading as well.

To call it on MT4 charts: Insert -> Indicators-> Bill Williams -> Market Facilitation Index

 

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