MACD is an effective tool that is very popular with most traders. We will use more MACD to help MFI complete this strategy. Why it is MACD and not another indicator, then in a while presenting the strategy, you will understand.

MFI is a tool available on MT4 as well as other platforms, so you can rest assured that you add it without having to go anywhere.

After adding these two tools, the price graph should look like this:


HOW TO USE MFI?

The easiest way to use MFI is to compare the 50 levels. If the value of the MFI rises and goes above 50 it means that a large amount of money is flowing into the market and it will drive up the price. On the contrary, the MFI fell below 50, indicating a large cash flow is being withdrawn from the market, causing the market to decline.


There is another way that the MFI has two levels of overbought - oversold corresponding to 2 levels of 80-20.


STRATEGY FIGHTING WITH MFI

This time will be an example of a BUY command. Sell order, you can do the opposite.

STEP 1: WAIT FOR THE MFI DOWN TO DOWN 20

The MFI once falls to the oversold level (level 20), which indicates that the large money has been withdrawn from the market exhaustively or that they are terribly shorting.


STEP 2: WAIT FOR MACD TO LEVEL UP to 0

The second step is to wait for the MACD to rise to zero. This signal provides the trader with information that the demand has appeared, the price has begun to rise.

But this signal is not enough to enter the order, we need one more signal to confirm the large money inflow to support the demand. The MFI will provide that information.


Right now the MFI is still on the bottom, although the MACD has risen from before. This proves that the large cash flow has not yet consensus in the price increase, and has not yet poured in to support the price increase.

The price increases, but without the force from the support volume, it cannot increase. The evidence is that after a slight rebound, prices continued to fall. Suffice it to see, analyzing the market and forgetting volume is a huge disadvantage.

STEP 3: BUY IMMEDIATELY WHEN THE MFI IS ABOVE 50

As mentioned above, the MFI is a tool for monitoring money flows. Specifically, an MFI above 50 represents money flow into the market. This is a confirmation signal for the price increase force.


We will enter a BUY order as soon as the MFI increases to the 50 levels. If you pay close attention to the chart you will see, when the MACD rises and is higher than 0, the price is still down, ie the bottom fishing demand is available but not strong enough.

A few more sessions later, when the MFI increased to 50, the price officially reversed to rise. This is how the MFI works. It is responsible for monitoring the money flow in and out and confirming the signal for MACD. The MACD plays the role of early direction indicator, early signaling of the market's reversal.

STEP 4: PLACE STOP LOSS AND TAKE PROFIT 

We will place a stop loss at the nearest bottom of the market and make a profit when the MFI is overbought.


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