Market Facilitation Index - BW MFI

The Market Facilitation Index (BW MFI) is a technical indicator that serves to determine a market direction and make a forecast by computing a price movement per tick. Indicator’s changes produce important data for market analysis. The Market Facilitation Index was invented by Bill Williams. His idea is to consider changes of the indicator and a volume. If the indicator goes up, it means that a number of participants entering the market increases. On the contrary, if the indicator falls, a volume gets smaller as market participants are indifferent and they leave a market.

However, sometimes the index shows that a volume declines while the indicator grows. It indicates that traders are dealing with a small volume; however, the price is changing due to speculative activity of dealers and brokers. When a volume increases while the Market Facilitation Index falls, it signals a fight between bears and bulls amid a large volume available on a market. In this particular situation, a price is making minor fluctuations due to the balance of driving forces. Eventually, the fight will show who will dominate the next trend. Either the buyers or the sellers will ultimately triumph in the struggle. Usually, the fracture of such a bar indicates if this particular bar determines the continuation of the trend, or terminates the trend. Bill Williams termed this bar a squat.


To calculate Market Facilitation Index, you need to subtract the lowest bar price from the highest bar price and divide it by the volume.



RANGE - is the multiplication factor, which brings the difference in points down to whole numbers.

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