Chaikins Money Flow Oil Technical Analysis & Money Flow Trading Signals

Developed by Marc Chaikin

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

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

Also the nearer the closing crude trading price is to the low of the crude trading price, the more the distribution of the crude oil.

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

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

Oil Technical Analysis & How to Generate Crude Trading Signals

Buy Trading Signal

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

Buy Crude Trading Signal

Sell Trading Signal

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

Sell Crude Trading Signal

Oil Trend Line break with Chaikin's money Flow

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

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

Oil Trendline Break

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

Oil Trendline Break

Divergence Oil

A divergence between this indicator & crude oil 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 crude trading price makes a lower low while the Chaikins Money Flow makes a higher low.

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