Chaikin Money Flow, developed by Marc Chaikin, measures the amount of Money Flow Volume in a given period. Money Flow Volume forms the basis of the Accumulation Distribution Line. Chaikin Money Flow collects Money Flow Volume for a given review period, usually 20 or 21 days, rather than the cumulative total Money Flow Volume. The resulting indicator fluctuates above / below the zero line like an oscillator. Chartists weigh the balance of buying or selling pressure with the absolute level of Chaikin Money Flow. Chartists can also search for crosses above or below the zero line to identify changes in money flow.
Interpreting Chaikin Money Flow
Chaikin Money Flow (CMF) is an oscillator that fluctuates between -1 and +1. The indicator seldom reaches these extremes. For 20 days of Chaikin Money Flow to reach +1 (-1), 20 consecutive closings are required at the highest (lowest) state. Typically, this oscillator fluctuates from zero as the centerline from -0.50 to +0.50.
Chaikin Money Flow measures buying and selling pressure for a specified period of time. The transition to the positive zone indicates buying pressure, while the transition to the negative zone indicates selling pressure. Chartists can use the absolute value of the Chaikin Money Flow to confirm or query the price action of the underlying. Positive CMF confirms the uptrend, but negative CMF calls for questioning the power behind the uptrend. The opposite is true for bearish trends.
 
[/url]Buying / selling[url=https://www.freeforex-signals.com/forex-signals/] forex signals signals
Chaikin Money Flow can be used to define a general buy or sell bias with only positive or negative values. The indicator oscillates above / below the zero line. In general, buying pressure is stronger when the indicator is positive, and selling pressure is stronger when the indicator is negative.
While this zero-line crossing seems simple enough, the truth is much sharper. Chaikin Money Flow sometimes only briefly crosses the zero line with a move that barely makes the indicator positive or negative. There is no tracking and this zero line cross section becomes a whipsaw (bad signal). Cartridges can filter these signals with buffers by setting the bullish threshold slightly above zero (+0.05) and the fall threshold slightly below zero (-0.05). These thresholds do not completely eliminate bad signals, but can help reduce whips and filter forex signals.
The chart above shows Freeport McMoran (FCX) with 20-day Chaikin Money Flow in the indicator window. There were at least 10 intersections in the zero line between February and December 2010. Adding a small buffer has drastically reduced the number of bullish and bearish signals. A move above + 0.05 was considered as bullish, while a move below -0.05 was considered a bearish. There were only three signals. These signals will come a little later, but reducing the whip saw may be worth it.
Harley Davidson (HOG) chart shows a whipsaw with a few good signals and May splashes. The CMF rose above + 0.05 for a few days, but this move couldn't hold and the indicator dropped below -0.05 in early June. Whips will happen especially during volatile periods or when the trend flattens. The CMF rose in July and continued to rise for the rest of the year. Note that HOG formed a falling wedge that retracted slightly over 62% in August while the CMF was still in bullish mode. This retracement offered a second chance to participate in CMF forex signals.
Chaikin Money Flow free forex signals is not suitable for all securities. The graph above is Chang (PFCB) with about 18 times over PF + 0.05 or below -0.05. Basing CMF signals on these crosses resulted in whip sawing one after another. It is important to analyze the underlying price trend and the characteristics of an indicator with a particular security. The PFCB is trending somewhat, but the price action within this trend is volatile and the money flow cannot maintain a positive or negative bias. It would be more correct to find a different indicator for these stocks.
 
Chaikin Money Flow https://www.freeforex-signals.com/is an oscillator that measures the trading of forex signals over a specified period of time. In its simplest form, flow of money prefers bulls when CMF is positive and bears when it is negative. Chartists looking for faster money flow changes can look for bullish and bearish divergences. Be careful though. The selling pressure still has the upper hand in the negative zone, even with an upward trend. This uptrend shows less selling pressure. The positive zone must be passed to indicate the true purchasing pressure. It can be used as a money flow oscillator with pure price oscillators such as CMF, MACD or RSI. As with all indicators, Chaikin Money Flow should not be used as a stand-alone indicator. Marc Chaikin also developed the Accumulation Distribution Line and the Chaikin Oscillator.

---

---