Money Flow Pulse

How it works

Money Flow Pulse (MFP) uses a normalized Money Flow Index (MFI) smoothed over 13 periods to assess market conviction through a color-coded five-tier system. Each tier represents a specific stage of volume-driven market behavior, ranging from strong inflow (+2) to strong outflow (-2).

The indicator calculates the Rate of Change (ROC) of the MFI to provide additional insight into how quickly market conviction is changing. This ROC feature visually displays momentum acceleration or deceleration, helping traders understand not just the direction of flow, but the speed and intensity of market movements.

Why it may be useful

MFP provides traders with a nuanced understanding of market dynamics beyond traditional price analysis by revealing the underlying volume and conviction behind price movements. It helps identify potential trend continuations, exhaustion points, and hidden market intentions that might not be apparent from price action alone.

By discretizing market flow into clear, interpretable tiers, MFP offers a responsive diagnostic layer that complements other technical tools. This approach allows traders to assess market quality, distinguish between genuine trend movements and potential fakeouts, and make more informed trading decisions based on flow-based insights.

When to explore it

MFP is most effective on intraday charts where volume dislocations and market microstructure play a crucial role in price behavior. It works best on 1-hour and 15-minute timeframes, where its high-resolution pulse check can reveal subtle shifts in market conviction and potential trading opportunities.

Traders should use MFP in confluence with structural overlays like anchored VWAP, moving averages, or key support and resistance levels. It is particularly useful for identifying divergences between price and flow, exposing moments of potential trend reversal or continuation, and providing a framework for understanding market urgency and effort.

Keep exploring