Delta Money Flow Index

5 nov.

The Delta Money Flow Index is a modified version of the traditional Money Flow Index that uses directional volume instead of total volume to measure buying and selling pressure in a different way.

It helps traders identify overbought/oversold conditions based on actual buy/sell pressure rather than just total volume. It's designed for traders who want to see if price movements are backed by genuine buying or selling activity.

How to use it:

- Values above 80 indicate overbought conditions
- Values below 20 indicate oversold conditions
- The 50 level acts as a neutral zone. Above suggests buyers are in control, below suggests sellers are in control.
- Traders can check for divergences for potential reversal signals
- Works best on intraday timeframes where delta volume is most meaningful

What makes it different:

Unlike the standard MFI which uses total volume, the Delta MFI calculates an approximation of volume delta by assigning positive volume to up-closing candles and negative volume to down-closing candles.

This means:
- It focuses on directional pressure, not just activity
- Filters out low-conviction volume that doesn't move price
- Provides clearer signals when actual buying/selling dominates

The indicator includes visual aids like background colors for overbought/oversold and a fill showing whether the Delta MFI is above or below the 50 midpoint for quick interpretation.

5 nov.

Notes de version

Added the option to also use an approximation of real Volume Delta as well.

For Delta the script uses a lower timeframe to calculate the differences between buying and selling.