What is 'Money Flow'

Money flow is calculated by averaging the high, low, and closing prices, and multiplying by the daily volume. Comparing that result with the number for the previous day tells you whether money flow was positive or negative for the current day.

BREAKING DOWN 'Money Flow'

When a stock is purchased at a higher price (an uptick), this is considered positive money flow. When the next trade is at a lower price (a downtick), this is considered to be negative money flow.



If more shares were bought throughout the day on the uptick than the downtick, net money flow is positive because more investors were willing to pay a premium for the stock. If money flow is negative when a stock's price is rising, this could spell trouble.

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RELATED FAQS
  1. Why is the Money Flow important for traders and analysts?

    See why the concept of money flow is useful in technical stock market analysis, and how traders and analysts can use money ... Read Answer >>
  2. What are the main differences between Money Flow & Money Flow Index (MFI)?

    Find out how to differentiate between standard money flow and the Money Flow Index, two methods of expressing the strength ... Read Answer >>
  3. What are the main differences and similarities between Money Flow and Real Flow?

    Learn the meaning of the terms "money flow" and "real flow," and find out how they relate to each other as they are used ... Read Answer >>
  4. What are the main differences and similitudes between Money Flow & Real Flow?

    Learn the meaning of the terms "money flow" and "real flow," and find out how they relate to each other as they are used ... Read Answer >>
  5. What is a common strategy traders implement when using the Uptick Volume?

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