Flow of fund (FOF) simply refers to the direction of money in the market. FOF indicator shows how the flow of funds impacts market price.
The idea of this indicator is very intuitive, when cash flowing into market results in prices raise, while cash flowing out of market results in prices fall.
The calculation of FOF involves the 3 basic and most important elements of financial market: TIME, PRICE and VOLUME.
Flow of fund indicator consists of 2 parts:
- HISTOGRAM shows the total amount of money get in or out of the market within 1 bar.
- If selling pressure is stronger than buying pressure, it will be a red bar,
- otherwise, it will be a green bar.
- Two Flow of fund trend lines, indicating the short and long term movement of money flow.
- Fast trend line uses a shorter period of time.
- Slow trend line uses a longer period of time.
- The length of period of both trend line is adjustable by user.
The orange line in the images is slow FOF, the blue line is fast FOF.
It works on all time frame(Tick, Minutes, Daily, Weekly, Monthly) with VOLUME.
