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money flow

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What is the money flow?

Money Flow (MF) refers to a mathematical function used to analyze changes in the value of a security by multiplying its typical price by daily trading volume. The typical price is the average of the high, low, and closing prices of a trading day. Shows multi-day price fluctuations, allowing traders to understand the current market situation.

The difference between the results obtained for the previous and current trading days allows traders to determine whether the market is positive or negative at the moment. While the positive money movement shows an increase in the price, the negative money direction indicates the opposite. Technically, this inflow or outflow allows traders to understand the difference in trading volumes by constructing tick up and down tick indicators.

Key Points

Money Flow (MF) is a mathematical function used to calculate changes in the value of an asset by multiplying its typical price, which is the average of the high, low, and closing prices on a given day, by daily trading volume.

This is not a technical indicator, but a method of constructing bullish and bearish indicators to help traders understand market movements over several days.

Demography, liquidity cycle, and market fluctuations are the factors that influence the flow of money in an economy.

When today’s prices are higher than yesterday’s, the market is positive and buyer-driven, and vice versa.

Understand the flow of money?

Cash flow, often considered a technical indicator of stock price movements, is not a true indicator. Instead, it leads to the construction of indicators of the difference in upside and downside trade volumes. In doing so, it helps traders interpret market movements in terms of price and volume for any financial instrument. Additionally, they can identify potential business opportunities.
can quickly calculate MF for a trading day just by knowing the typical price and trading volume. Traders can compare the results of previous and current days to determine the change in value. This feature is also useful for understanding the risks and rewards of investing in global stocks.

If today’s prices are higher than yesterday’s, build a bullish indicator Indicating a positive market, driven by buyers. On the other hand, if the prices of the current day are lower than those of the previous day, it builds a bearish indicator. Indicates negative price movement and a market driven by sellers. However, no price change for either day implies a cash flow market situation.

The factors that influence the

The factors that influence the
1 - demographic

The type of population in a country strongly influences the investment decisions they do. It helps traders determine if an economy is stable or if you head to Basso.It is one of the most important factors that merchants take into account while estimating foreign direct investment

2 - Liquidity cycle

How a country's central banks participate in asset movements plays a crucial role in determining the MF. Investors seek to monitor central bank involvement in assessing asset performance over different liquidity cycles. if sufficiently active, investors and traders feel more secure in their investments.

3 - Market fluctuations

The fluctuation of the prices of assets on the market is an element to be monitored daily. It helps traders determine if an economy is stable or declining. This is one of the most important factors that traders consider when estimating the FDI (foreign direct investment).

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