Chaikin Money Flow Gold Trading Analysis and Money Flow Gold Trading Signals
Developed by Marc Chaikin
This an oscillator which measure the Accumulation/distribution of money that is flowing into and out of gold.
The indicator is based on the fact that the nearer the closing xauusd price is to the high of the gold price, the more the accumulation of gold.
Also the nearer the closing xauusd price is to the low of the gold price, the more the distribution of gold.
Chaikin Money Flow will be positive if xauusd price consistently closes above the bar's midpoint with increasing volume.
However, if xauusd price consistently closes below the bar's midpoint with increasing volume the indicator will be negative.
XAUUSD Trading Analysis and Generating XAUUSD Trading Signals
Buy XAUUSD Signal
A crossover of above zero signifies accumulation of gold. A value of above +10 is a buy/bullish signal. Values above +20 signify a strong upward trending market.
Buy Gold Trading Signal
Sell XAUUSD Signal
A Zero line cross of below zero signifies distribution of gold. A value of below -10 is a short/sell gold signal. Values below -20 signify a strong downward trending market.
Sell Gold Trading Signal
Gold Trend Line break with Chaikin’s money Flow
The money flow can be used to confirm gold trend line breaks or support/resistance level breaks.
If xauusd price breaks an upward gold trend line, Gold traders should then wait for a confirmation signal from the indicator values of below -10.
Gold Trend Line Break - Sell Gold Trading Signal
If xauusd price breaks an downward gold trend line, Gold traders should then wait for a confirmation signal from indicator values of above +10.
Gold Trend Line Break - Buy Gold Trading Signal
Divergence XAUUSD Trading
A divergence between this indicator and xauusd 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 xauusd price makes a lower low while the Chaikin Money Flow makes a higher low.
A bearish divergence signal occurs when xauusd price makes a higher high while the Chaikin Money Flow makes a lower high.