An RSI-style oscillator computed from typical price multiplied by volume, so it reflects both price direction and participation.
MFI takes the typical price of each bar, multiplies by volume, then applies the same up-versus-down ratio logic as rsi to produce a bounded 0 to 100 reading. It is often described as volume-weighted RSI.
The intended advantage is that a move on heavy volume registers more strongly than the same move on light volume, which is a sensible refinement.
All the usual oscillator caveats apply, including saturation in trends and the misleading labels overbought and oversold. Volume data quality matters too: in fragmented equity markets and in crypto, reported volume can be unreliable, which propagates straight into the indicator.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Divergence between price and RSI. RSI measures how one-sided recent price moves have been on a 0–100 scale. Here price sets a higher peak while RSI sets a lower one, so the second push carried less momentum than the first.The stochastic oscillator. The stochastic shows where each close sits inside the recent high-to-low range, on a scale of 0 to 100. Readings above 80 mean closes are hugging the top of that range and below 20 the bottom; the circle marks the fast line turning up through the slow one.
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