Chaikins Money Flow CFD Technical Analysis & Money Flow CFD Signals
Developed 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 cfds price is to the high of the cfds price, the more the accumulation of the cfd.
Also the nearer the closing cfds price is to the low of the cfds price, the more the distribution of the cfd.
Chaikins Money Flow will be positive if cfds price consistently closes above the bar's midpoint with increasing volume.
However, if cfds price consistently closes below the bar's midpoint with increasing volume the indicator will be negative.
CFDs Technical Analysis and Generating CFDs Signals
Buy CFDs 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 CFDs Signal
Sell CFDs 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 CFDs Signal
CFD 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 cfds price breaks an upward cfd trend line, CFD traders should then wait for a confirmation signal from the indicator values of below -10.
CFDs Trendline Break
If cfds price breaks an downward cfd trend line, CFD traders should then wait for a confirmation signal from indicator values of above +10.
CFDs Trendline Break
Divergence CFDs
A divergence between this indicator & cfds 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 cfds price makes a lower low while the Chaikins Money Flow makes a higher low.
A bearish divergence signal occurs when cfds price makes a higher high while the Chaikins Money Flow makes a lower high.
