The document presents information on the Money Flow Index (MFI) and SuperTrend indicator. MFI is an oscillator that uses price and volume to measure buying and selling pressure, and can provide earlier signals than other oscillators. SuperTrend is a trend-following indicator that generates buy and sell signals when the indicator line crosses above or below the closing price. Both indicators work best in trending markets and can be used to identify overbought/oversold levels, divergences, and generate trading signals. Calculations for MFI involve typical price and money flow, while SuperTrend uses average true range and bands positioned above and below the midpoint.

1. MONEY FLOW INDEX
&
SUPER TREND INDICATOR
PRESENTATION BY GROUP 3

2. MONEY FLOW INDEX
■ The Money Flow Index (MFI) is an oscillator similar to RSI which uses both price and
volume to measure buying and selling pressure.
■ It is created by Gene Quong and Avrum Soudack.
■ MFI is also known as volume-weighted RSI.
■ It is a “LEADING INDICATOR”
■ The Money Flow Index (MFI) is a momentum indicator that measures the strength of
money flowing into and out of a stock.
■ MFI is best suited to identify reversals and price extremes with a variety of signals.
■ It is used to predict directional movement of the market.

3. IMPORTANCE OF MFI
■ Measures market sentiment.
■ Gives indication whether stock is overbought or oversold.
■ MFI can sometimes provide earlier signals versus RSI or other oscillators.
■ Conversely, it sometimes will not provide a false signal provided by other oscillators.

4. CALCULATING MFI:
1. Typical Price = (High + Low + Close)/3
2. Raw Money Flow = Typical Price x Volume
3. Money Flow Ratio = (14-period Positive Money Flow)/(14-period Negative Money
Flow)
4. Money Flow Index = 100 – 100/(1 + Money Flow Ratio)

5. INTERPRETATION
■ The MFI’s calculation generates a value that is then plotted as a line that moves
within a range of 0-100, making it an oscillator.
■ When the MFI rises, this indicates an increase in buying pressure.
■ When it falls, this indicates an increase in selling pressure.
■ The Money Flow Index can generate several signals:
– overbought and oversold conditions
– divergences (Positive/Negative)

6. SELL CALL USING MFI (OVERBOUGH ZONE)

7. BULLISH FAILURE SWING MFI

8. BEARISH DIVERGENCE USING MFI

9. DISADVANTAGES OF MFI
■ The smaller period a trader sets, the more flexible the curve of the indicator will be.
A trader will receive more trading signals. At the same time, there will be more false
signals.
■ If a trader chooses a longer period, the risk of false signals will be lower, but the
curve will become smoother and can give lagging signals.

10. SUPERTREND INDICATOR
■ Created by Olivier Seban.
■ Used to work on different time frames: 15 minutes, hourly, weekly, and daily charts,
■ It is a trending indicator, and like all trending indicators it works well in trending
markets (i.e. in uptrends and downtrends), but generally, it fails in a sideways-
moving market.
■ Works for futures, forex, and equities.
■ Gives an accurate reading about an ongoing trend.
■ Understanding and identifying buying and selling signals in supertrend is the main
crux for the intraday traders.

11. ABOUT SUPERTREND INDICATOR
■ It is constructed with two parameters, namely period and multiplier.
■ The default values used while constructing a super indicator are 10 for average true
range or trading period and three for its multiplier.
■ The buy and sell signals are generated when the indicator starts plotting either on
top of the closing price or below the closing price.
■ A buy signal is generated when the ‘Supertrend’ closes above the price and a sell
signal is generated when it closes below the closing price.

12. CALCULATION OF SUPERTREND
■ The default values used while constructing a superindicator are 10 for average true range or
trading period and 3 for its multiplier.
■ Upper Band = (high + low / 2 + multiplier x ATR
■ Lower Band = (high + low) / 2 – multiplier x ATR
■ Calculation of Average True Range –
– [(Prior ATR x 13) + Current TR] / 14
– Here, 14 indicates a period. Hence, the ATR is derived by multiplying the previous ATR
with 13. Add the latest TR and divide it by period.
■ Thus, ATR plays an important role in the supertrend technical analysis indicator.

13. WHERE TO USE SUPERTREND?
■ A ‘Supertrend’ also acts as a strong support or resistance and it also provides a
trailing stop loss for the existing trade. In a ‘buy’ signal, any dip towards the indicator
can also be used as a buying opportunity and vice versa.
■ It works well in a trending market in addition to volume-based indicators, but might
give false signals when the market moves sideways .
■ This indicator performs badly in volatile markets, traders need to ensure they have
identified the underlying trend and use this indicator in tandem with other
indicators.

14. HOW TO USE SUPERTREND?
■ Buy signal is generated when the indicator flips over the closing price. It is generated
when supertrend is below the closing price and it turns GREEN in color.
■ Sell signal is generated when the supertrend closes above the closing price and the
indicator turns RED in color.

15. BUY SIGNAL USING SUPERTREND

16. SELL SIGNAL USING SUPERTREND

17. SUPPORT AND SELL SIGNAL USING SUPERTREND

18. BUY SIGNAL USING SUPERTREND

19. THANK YOU