Chaikin money flow

What it shows

CMF takes the same money flow volume used in the A/D line, adds it up over 20 bars, and divides by the total volume over those 20 bars.

A positive value means closes have been in the upper part of the range on balance. A negative value means the lower part.

How we find it

The same code that draws it on your chart follows these steps, with the same result every time.

1. Compute money flow volume for each bar.
2. Sum it over 20 bars.
3. Divide by the sum of volume over 20 bars.
4. Plot under the price with a zero line.

Starting values: Length 20. These are proposed and will be tuned on real price data before launch.

How to read it

• The panel shows CMF from −1 to 1.
• Above zero: closes were in the upper half on balance.
• Below zero: lower half.

Status labels you may see

Limits

• Bounded, so can get stuck near the limits.
• Ignores gaps.
• Sensitive to one big bar.

Try it in forecastviz

• Open any ticker and choose Volume and money flow → Chaikin money flow in the left menu.
• Switch between 3M, 6M, 1Y to see how the picture changes.
• Compare with Accumulation/distribution line and Chaikin oscillator on the same chart.

Questions

Related trends

Further reading

• Murphy, Technical Analysis of the Financial Markets
• Granville, Granville's New Key to Stock Market Profits
• Pring, Technical Analysis Explained
• Achelis, Technical Analysis from A to Z