What the Market Facilitation Index shows
The Market Facilitation Index (BW MFI) is a Bill Williams indicator. It measures how far price moved for each unit of volume on a bar. A high value means price moved a long way on little volume. A low value means a lot of volume produced little movement.
Do not confuse it with the Money Flow Index. Both are abbreviated "MFI", but they are different tools.
Ready to try it on a real or demo account?
Partner link · trading carries a high risk of loss
Formula and default settings
BW MFI = (High − Low) / Volume
- High − Low is the bar's range.
- Volume in forex is usually tick volume, which counts price changes, not traded contracts.
The indicator has no period setting. In MetaTrader 5 you can choose tick or real volume where the symbol provides it. Colours can be changed. The absolute value depends on the symbol and the data feed, so compare readings only within the same chart and timeframe.
How to add it in MT4 and MT5
In MetaTrader 4 and MetaTrader 5, open Insert → Indicators → Bill Williams → Market Facilitation Index. You can also drag it from the Navigator window. It appears as a histogram in a separate window below the price chart.
Reading the bar colours
Each bar is coloured by comparing MFI and volume with the previous bar:
| Colour (MetaTrader default) | MFI | Volume | Bill Williams' name | Usual reading |
|---|---|---|---|---|
| Green | up | up | Green | Active participation, movement is being driven |
| Brown | down | down | Fade | Interest is fading |
| Blue | up | down | Fake | Price moves without volume support |
| Pink | down | up | Squat | Heavy volume, little movement: a struggle between buyers and sellers |
A drawn example
The sketch below is illustrative, not a real market:
A squat bar sometimes appears before a larger move as volume builds inside a narrow range. The direction of that move is not shown by the MFI itself.
Typical uses
- Filtering signals from other Bill Williams tools such as the Alligator, Fractals or the Awesome Oscillator.
- Spotting squat bars near support and resistance or inside ranges before a breakout.
- Checking whether a move has volume behind it, alongside the volume indicator.
A "market facilitation index strategy" works best as a context filter, not as a standalone entry rule.
Where it misleads
- Tick volume is not traded volume. Feeds differ between providers, so colours can differ between platforms.
- Session changes. Volume naturally rises at session opens and falls overnight. This produces green and fade bars that only reflect the time of day.
- News spikes. A wide bar on a release inflates MFI for a single bar.
- Low timeframes. Colours flip so often that they mostly show noise.
- No direction. A squat bar does not say which way price will break.
Leveraged CFD and forex trading can lose money fast. No indicator removes that risk. See risk management.
Frequent questions
Is the BW MFI the same as the Money Flow Index?
No. The BW MFI divides range by volume. The Money Flow Index is an oscillator based on price and volume over a period.
Does the Bill Williams MFI have a period?
No. It is calculated bar by bar from the current bar only.
Which colour matters most?
Traders usually watch squat bars, because they show heavy volume with little movement. The meaning still depends on the context around them.
Can I practise reading it without risk?
Yes. Add it on a demo account chart and compare the colours with price action over time.