MFI Oversold Entry Frequency: 240 Settings Tested
240 MFI settings on USD/JPY in 2024–2025: 137 four-hour settings took fewer than ten trades, while the textbook long reversed from +1,379.1 to −654.2 pips.
MFI, the Money Flow Index, is usually introduced as "RSI weighted by volume." Below 20 is oversold and above 80 overbought, the same reading as RSI with volume behind it.
I tested it on USD/JPY across the whole of 2025: six periods × five entry levels × four exit levels × two directions, 240 settings, on three timeframes, then the same 240 again on 2024.
The first finding came before any question of performance. On forex's higher timeframes, this indicator hardly trades at all.
On four-hour bars, 48 of the 240 settings took no trades in a year and 137 took fewer than ten. On hourly bars, 20 took none and 81 took fewer than ten. Before arguing about the best period, there is the question of whether there is a sample to argue about.
Does MFI work on forex?
For MFI to drop below 20, the volume-weighted total of down bars has to dominate the up bars across the whole lookback. That is a narrower condition than RSI's, so the extremes are reached less often.
Raise the timeframe and there are fewer bars for the condition to occur in. A year of four-hour bars is about 1,610 candles. Choose period 28 with a level of 10 there and going a whole year without the condition lining up is an ordinary outcome, not a freak one.
| Timeframe | Median trades a year (of 240 settings) | Settings with 0 trades | Settings under 10 trades |
|---|---|---|---|
| 15-minute | 80 | 8 / 240 | 54 / 240 |
| 1-hour | 23 | 20 / 240 | 81 / 240 |
| 4-hour | 5 | 48 / 240 | 137 / 240 |
(2025, long and short sides combined.)
Does the volume premise hold?
One more thing worth stating before the results.
MFI's calculation takes volume as an input. In equities that volume is consolidated at an exchange and comes close to meaning "how much money moved." Forex has no such consolidated figure. What appears on a chart is what a single source observed.
So when MFI is used on forex, the weighting that gives the indicator its name rests on weaker ground than the textbook description implies. Every number below sits on that footing.
Adding MFI to a chart
| Platform | How to add it |
|---|---|
| MT4 / MT5 | Built in — Navigator, Oscillators, Money Flow Index |
| TradingView | In the indicator list as "Money Flow Index" |
| Browser (Formiq) | In the indicator list, with an adjustable period |
How this was measured
The rule is directional: "below 20" can only be a buy and "above 80" can only be a sell, so the long fade and short fade are tested as separate trading rules.
| Item | Value |
|---|---|
| Pair | USD/JPY |
| Period | 2025-01-01 to 2025-12-31 (2024 run identically for comparison) |
| Timeframes | 15-minute / 1-hour / 4-hour |
| Bars tested | 6,226 hourly bars in 2025; 24,903 on 15-minute, 1,610 on 4-hour |
| Long side | Buy when MFI falls below the entry level (10–30), close when it rises above the exit level (50–90) |
| Short side | The mirror (sell at 70–90, close at 10–50) |
| Stops and targets | None |
| Costs | 0.3 pip spread, zero slippage, 0.1 lot |
| Combinations | 6 periods (7–40) × 5 entry levels × 4 exit levels × 2 directions = 240, per timeframe and per year |
| Method | Executed in Formiq's backtester; pips recomputed from each trade's fill prices |
How did the textbook 14, 20/80 do?
Period 14, buy below 20, close above 80: the version everyone quotes.
| Timeframe | Side | Year | Trades | Win rate | Annual net |
|---|---|---|---|---|---|
| 15-minute | Long | 2025 | 145 | 61.38% | +1,379.1 pips |
| 15-minute | Long | 2024 | 113 | 62.83% | −654.2 pips |
| 15-minute | Short | 2025 | 146 | 60.27% | +1,426.3 pips |
| 15-minute | Short | 2024 | 113 | 50.44% | −2,236.8 pips |
| 1-hour | Long | 2025 | 37 | 56.76% | −108.0 pips |
| 1-hour | Long | 2024 | 27 | 77.78% | +245.4 pips |
| 4-hour | Long | 2025 | 9 | 77.78% | +570.4 pips |
| 4-hour | Long | 2024 | 6 | 50.00% | −277.0 pips |
The 15-minute long setup had similar win rates in the two years, 61.38% and 62.83%, while annual net reversed from +1,379.1 to −654.2 pips.
Each dot is one of the 120 long-side settings: 2024 across, 2025 up. The red dot is the textbook setting, sitting top-left: heavily negative one year, heavily positive the next.
Across the whole cloud, larger 2024 results do not visibly line up with larger 2025 results. The textbook setting is one of the points that changes sign.
Do the long and short sides differ?
| Timeframe | Side | Year | Profitable settings | Median annual net | Profitable in both years |
|---|---|---|---|---|---|
| 15-minute | Long | 2025 | 74 / 120 | +35 pips | 50 / 120 |
| 15-minute | Long | 2024 | 77 / 120 | +142 pips | 50 / 120 |
| 15-minute | Short | 2025 | 80 / 120 | +97 pips | 7 / 120 |
| 15-minute | Short | 2024 | 11 / 120 | −1,195 pips | 7 / 120 |
| 1-hour | Long | 2025 | 46 / 120 | −31 pips | 31 / 120 |
| 1-hour | Long | 2024 | 56 / 120 | 0 pips | 31 / 120 |
| 1-hour | Short | 2025 | 37 / 120 | −186 pips | 3 / 120 |
| 1-hour | Short | 2024 | 5 / 120 | −1,214 pips | 3 / 120 |
| 4-hour | Long | 2025 | 77 / 120 | +156 pips | 53 / 120 |
| 4-hour | Long | 2024 | 65 / 120 | +84 pips | 53 / 120 |
| 4-hour | Short | 2025 | 64 / 120 | +33 pips | 7 / 120 |
| 4-hour | Short | 2024 | 20 / 120 | −603 pips | 7 / 120 |
The short side breaks in 2024 on all three timeframes. USD/JPY rose 1,632 pips that year, and selling "overbought" through that does not survive. The same thing happened to Williams %R.
The long side hovers around zero: +35 and +142 pips on 15-minute, −31 and 0 on hourly. Neither winning nor losing much is what this indicator did on its own.
What about settings with enough trades?
Restricting to settings that took at least 20 trades (hourly long side, 2025, 65 settings):
- Win rate range: 47.5% to 72.73%
- Median net: −304 pips
- Profitable: 13 of 65
The high win rates did not produce positive median net. As in the Williams %R test, the counter-trend exit closes after a return toward the centre, limiting the average win while a continued move can expand the average loss.
Note also that including the near-empty settings puts rows with 0% and 100% win rates into the table. A win rate computed from one or two trades a year is not a win rate in any useful sense. Read every win rate here next to its trade count.
Using MFI as a standalone signal on forex is not supported by these numbers. On a timeframe where it fires often enough, and alongside a separate judgement about direction, is as far as this goes.
The same method applied to Williams %R, QQE, Aroon, RVI and Supertrend.
Notes
- One pair, two years
- Forex volume is not a market-wide figure. MFI's calculation rests on it
- Entries and exits both fill at bar closes
- Settings with very few trades are included in the aggregates; the figures excluding them are given separately above
Questions people ask
- What are the best MFI settings?
- This test did not find one. On 15-minute bars, the textbook long setup (period 14, buy below 20, close above 80) took 145 trades for +1,379.1 pips in 2025 and 113 trades for −654.2 pips in 2024. The same setting changed from profit to loss.
- Does MFI work on forex?
- Check whether it fires before asking whether it works. On four-hour bars, 48 of 240 settings took no trades at all in a year and 137 took fewer than ten. On hourly bars, 20 took none and 81 took fewer than ten. Most advice about MFI settings cannot be evaluated on forex's higher timeframes for lack of a sample.
- How is MFI different from RSI?
- MFI is RSI weighted by volume: it compares up bars and down bars with their volume included. Forex has no consolidated exchange volume, so what a chart shows is only what one data source observed. The weighting that gives MFI its name rests on weaker ground here than it does in equities.
- What win rate does MFI produce?
- Restricted to settings that took at least 20 trades, the long side on hourly bars in 2025 ran from 47.5% to 72.73%. The median net result was −304 pips and only 13 of those 65 settings finished positive: high win rates without the result, as with other counter-trend indicators.
- Is MFI built into MetaTrader?
- Yes. Both MT4 and MT5 ship it as Money Flow Index under Oscillators. TradingView lists it as "Money Flow Index". Formiq's charts include it with an adjustable period.
Formiq is a free browser-based FX terminal with replay practice and no-code backtesting. Open the chart or see what the free plan includes.