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Forex Glossary

The Industry's Most Important Terms Explained

The forex industry is made up of countless definitions and it's easy to forget a few along the way. But because no forex education can be complete without a glossary of forex terms, we've compiled one which aims at explaining key definitions in the simplest way possible. This way, you'll never be lost or confused again!


Market Facilitation Index

A technical indicator developed by Dr. Bill Williams to evaluate the efficiency of the price movement. An efficient market is defined as a market when all traders (long-term and short-term) are actively trading.  The indicator combines price and volume:

MFI = (High – Low) * Volume

There are 4 combinations:

  • MFI Up and Volume Up (Green): Follow the direction of the market.  The market is accelerating as more traders enter the market in the established direction.
  • MFI Down and Volume Down (Brown): Both MFI and Volume fade, resulting in no interest to advance further.
  • MFI Up and Volume Down (Blue):  Price movement without volume confirmation.  It is a fake move.
  • MFI Down and Volume Up (Pink): The most important signal.  The increased volume signifies the increased number of participants entering the market.  The squat as Bill Williams named it, implies a reversal or continuation of the prevailing trend.

Category: Technical Indicators

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