Chaikins Money Flow Technical Analysis & Money Flow Signals

Created by Marc Chaikin

This an oscillator which measure the Accumulation/distribution of money that is flowing into and out of a cfd.

The indicator is based on the fact that the nearer the closing price is to the high of the price, the more the accumulation of the cfd.

Also the nearer the closing price is to the low of the price, the more the distribution of the cfd.

Chaikins Money Flow will be positive if price consistently closes above the bar's midpoint with increasing volume.

However, if price consistently closes below the bar's midpoint with increasing volume the indicator will be negative.

CFDs Analysis & Generating CFDs Signals

Buy Signal

A crossover of above zero signifies accumulation of a cfd. A value of above +10 is a buy/bullish signal. Values above +20 signify a strong upward trending market.

Buy Signal

Sell Signal

A Zero line cross of below zero signifies distribution of a cfd. A value of below -10 is a short/sell cfd signal. Values below -20 signify a strong downward trending market.

Sell Signal

Trend Line break with Chaikin's money Flow

The money flow can be used to confirm cfd trend line breaks-out or support/resistance level breaks out.

If price breaks an upward trend line, traders should then wait for a confirmation signal from the indicator values of below -10.

Trendline Break

If price breaks an downward trend line, traders should then wait for a confirmation signal from indicator values of above +10.

Trendline Break

Divergence CFDs

A divergence between this indicator & price often signals a pending reversal in market direction. However as with all divergences its best to wait for confirmation signals before trading the divergence.

A bullish divergence signal occurs when price makes a lower low while the Chaikins Money Flow makes a higher low.

A bearish divergence signal occurs when price makes a higher high while the Chaikins Money Flow makes a lower high.