How each contribution is classified
Typical price is (high + low + close) / 3. Multiplying it by volume gives a price-volume contribution. A higher typical price assigns it to the positive side; a lower one assigns it to the negative side. When typical price is unchanged, this implementation adds nothing to either side.
Convert the ratio to an oscillator
With positive contributions totaling 3,000 and negative contributions totaling 1,000, the ratio is three. MFI = 100 − 100 / (1 + 3) = 75. The web defaults use 14 periods and thresholds of 80 and 20. Both the period and thresholds are configurable.
When both totals are zero, the calculation returns the neutral value 50. With positive contributions and no negative ones, it returns 100. Check history and volume alongside these cases before interpreting the display.
Thresholds do not prescribe direction
MFI can remain high during a sustained move. It measures neither actual account capital inflows nor a complete buyer-to-seller ratio. For a review, compare the same source and period and record the threshold’s role in your predefined setup.
MFI = 100 − 100 / (1 + positive contribution total / negative contribution total).