Chaikins Money Flow Technical Analysis and Money Flow Trading Signals

Developed by Marc Chaikins

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

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

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

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.

Technical Analysis and Generating Trade Signals

Buy Silver Signal

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

Buy Trading Signal

Sell Silver Signal

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

Sell Trade Signal

Trend Line break with Chaikin’s money Flow

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

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

Trend Line Break - Sell Trading Signal

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

Trend Line Break - Buy Trading Signal

Divergence Silver Trading

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 trading price makes a lower low while the Chaikins Money Flow makes a higher low.

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