Chaikin Money Flow Metals 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 metals.

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

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

Chaikin Money Flow will be positive if metals price consistently closes above the bar's midpoint with increasing volume.

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

Metal Analysis and How to Generate Trading Signals

Buy Trading Signal

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

Buy Trading Signal

Sell Trading Signal

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

Sell Trading Signal

Metals Trend Line break with Chaikin's money Flow

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

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

Metals Trend-Line Break - Sell Trading Signal

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

Metals Trend-Line Break - Buy Trading Signal

Divergence Metal Trading

A divergence between this indicator & metals 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 metals price makes a lower low while the Chaikin Money Flow makes a higher low.

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