Market Facilitation Index: Color Bars That Reveal Real Market Flow
The Market Facilitation Index (MFI) is a Bill Williams indicator that measures market efficiency. Take the price range, divide by volume. Higher numbers mean price moves more per unit of volume. Lower numbers mean the market is stalling. Williams gave each bar a color: green when both price range and volume rise, blue when both fall, gray when price moves on weak volume, and red when heavy volume meets little price movement. I've traded MFI on US equities since early 2024 and it behaves differently than I expected on short timeframes. Red bars show up more often on 5-minute charts than I'd like.
