Market Facilitation Index (MFI)

The Market Facilitation Index (MFI) is one of Bill Williams’ trading tools. It measures how easily price moves: how much price range the market produces for each unit of volume. On its own the number means little. Its value comes from comparing how it changes with how volume changes, which sorts every bar into one of four types.

Don’t confuse it with the Money Flow Index, which shares the abbreviation MFI but is a different indicator: a volume-weighted version of RSI.

How it is calculated

MFI = ( High - Low ) / Volume

where High and Low are the bar’s highest and lowest prices, and Volume is the bar’s volume.

A high MFI means price covered a wide range on relatively little volume: the market moved easily. A low MFI means a lot of volume produced only a small range: buyers and sellers absorbed each other’s orders. Because the value depends on the price level and the stock’s normal volume, MFI is only compared with the same instrument’s previous bar, never across stocks.

The four bar types

Compare each bar’s MFI and volume with the previous bar’s. Williams gave each of the four combinations a name and a color:

Why the squat bar matters most

Williams considered the squat the most important bar. Heavy volume with little progress shows that a decision is near. Squats often appear at the end of a trend, just before a reversal, or just before a breakout from a range. The direction in which price breaks out of a squat bar’s high or low is a strong clue to the next move.

A squat is not a signal on its own. It tells you where to pay attention. Traders typically wait for price to break the squat bar’s high or low and enter in that direction, with the opposite end of the bar as a stop.

Practical tips

• Use MFI with a trend tool, such as moving averages or Williams’ own Alligator, to tell squats at the end of a trend from squats inside a range.
• Volume data must be reliable. MFI is meaningful for stocks and exchange-traded instruments with real volume.
• On intraday data, compare complete bars only. A bar that is still forming has not traded its full volume.

Screen for it on MarketInOut

You can screen for squat bars with a formula: MFI fell versus the previous bar while volume rose. For example, liquid NYSE and Nasdaq stocks:

exch(nyse,nasdaq) and type(stock) and price > 1 and advol(21) > 1
and (h - l) / v < (h@1 - l@1) / v@1 and v > v@1

Run it after the close, when the day’s volume is complete. Change the first < to > to find green bars, where MFI and volume both rose.

Rewritten and expanded in October 2026 from an article in MarketInOut’s original article library.