Money Flow is an important concept for traders to understand. It 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 traders whether money flow was positive or negative for the current day. Positive money flow indicates that prices are likely to move higher, while negative money flow suggests prices are about to fall.So what does this all mean? Essentially, if you want to buy a stock, you want to see positive money flow. This means that more people are buying than selling and that prices are likely to go up. On the other hand, if you see negative money flow, it may be time to sell because prices could be about.
