Chaikin Money Flow trading indicator

Chaikin Money Flow (CMF) – a technical analysis indicator used to measure Money Flow Volume over a set period of time.

Formula:

((((Close – Low) – (High – Close)) / (High – Low)) * Volume) / Total(Volume, 21)

Key takeaways:

1. CMF is used to measure buying and selling pressure of security for a single period.
2. CMF fluctuates between 1 and -1 and can be used to anticipate future changes and trading opportunities.
3. Crosses of the Zero Line can indicate an impending trend reversal.

Counterarguments:

1. CMF does not take into account the change in the trading range between periods.
2. CMF should not be used as a stand-alone signal-generating indicator.