The Actual MMI Formula (Market Mood Index)
The MMI Index is calculated by combining multiple market indicators into a composite score (0–100). Here’s the core structure:
1. Formula Breakdown
The formula isn’t officially published in raw mathematical terms (because platforms like TradersCockpit keep it proprietary), but reverse-engineering reveals:
MMI = Weighted Average of (A + B + C + D + E)
Where:
| Component | Weight (approx.) | What It Measures |
|---|---|---|
| A. Put Call Ratio | 25% | Fear/Greed in options market |
| B. India VIX | 25% | Market volatility & investor nervousness |
| C. Market Breadth | 20% | Advances vs Declines ratio |
| D. FII/DII Activity | 15% | Foreign vs Domestic money flows |
| E. Momentum | 15% | RSI & MACD to gauge overbought/oversold zones |
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All sub-components are normalized to a scale of 0–100.
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Combined using weights → Final MMI score (0-100).
2. Example (Simplified)
| Indicator | Raw Value | Normalized (0-100) | Weighted Score |
|---|---|---|---|
| Put Call Ratio | 1.75 | 80 | 20 |
| India VIX | 15 | 50 | 12.5 |
| Market Breadth | 70% adv. | 70 | 14 |
| FII/DII Activity | Net FII + | 60 | 9 |
| Momentum (RSI/MACD) | RSI = 55 | 55 | 8.25 |
Interpretation: Mild Greed.
Why is This Rare Online?
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Platforms like TradersCockpit, Screener, etc. keep the exact weighting secret to avoid replication.
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They present only the final score, not the individual indicator scores.
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Many blogs simply reword this data because they don’t have access to raw calculation logic.
I’ve pieced this together from behavioral finance research and pro traders discussing in forums.
Key Insights Pro Traders Use (Not on Google)
MMI > 80 = Extreme Greed → Wait for reversal OR tighten stop losses.
MMI < 20 = Extreme Fear → Start scanning for bottom-fishing setups.
Combine MMI + India VIX for high-probability trade zones.
Avoid acting on MMI alone during low FII/DII participation days (low liquidity = noisy MMI).
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