money flow
Money Flow tracks whether the money moving through a stock is mostly buying pressure or mostly selling pressure, more than whether the price went up or down.
In plain English
Two market women sell exactly the same amount of tomatoes today. One sells fast, in small quantities, to a steady stream of customers who keep coming back. The other sells the same total quantity, but only because she dropped her price twice before anyone bit. Same sales figure at the end of the day, completely different stories underneath.
Money Flow is the tool that tells you which of those two stories is happening in a stock. A share price can close exactly where it started, and yet the money calmly piling in during the day can be heavily on the buying side or heavily on the selling side. The closing price alone hides that. Money Flow does not.
It works by looking at the price and the volume together for each trading session, then checking whether that session closed higher or lower than the one before. If it closed higher, that day's money is counted as buying pressure. If lower, it is counted as selling pressure. Add these up over time and you get a running consider of conviction, more than movement.
On the Nigerian Exchange, a trader watching a bank stock like GTCO might see the price sit flat for a week. If Money Flow is climbing steadily underneath that flatness, it can suggest big buyers are accumulating calmly before the price eventually breaks upward. A trader in London watching a FTSE stock does the same thing, checking whether rising prices are backed by real buying volume or just a few thin trades pushing it up.
For someone in Manchester sending money home every month, the lesson translates nicely. A steady stream of transfers, even small ones, builds something solid over time. One large panicked transfer after ignoring the account for months does not carry the same strength, even if the total naira value looks similar on paper.
A stock closes at ₦52 on Monday with 2 million shares traded, then closes at ₦53 on Tuesday with 5 million shares traded. Money Flow rises sharply because Tuesday's higher close came with heavier volume, showing real buying interest rather than a lucky, thinly traded uptick.
Questions people ask
Is Money Flow the same thing as trading volume?
Not quite. Volume just tells you how many shares changed hands. Money Flow combines that volume with price direction, so it shows whether the volume was mostly on up days or down days, giving a sense of buying or selling pressure rather than just activity.
Can ordinary investors use Money Flow, or is it only for professional traders?
Ordinary investors can use it too, especially on trading platforms that show it as a chart indicator. It is most useful for spotting when a stock's price and its underlying buying or selling pressure are telling different stories, which can hint at a change coming before the price fully reflects it.
Does strong Money Flow guarantee a stock will keep rising?
No, and nobody should treat it that way. It is one clue among many, useful for context, but it can still turn quickly if the news changes or big holders decide to sell. Treat it as one voice in the room, not the final word.
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