Chaikin Money Flow CFD Technical Analysis and 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 cfd price is to the high of the cfd price, the more the accumulation of the cfd.
Also the nearer the closing cfd price is to the low of the cfd price, the more the distribution of the cfd.
Chaikin Money Flow will be positive if cfd price consistently closes above the bar's midpoint with increasing volume.
However, if cfd price consistently closes below the bar's midpoint with increasing volume the indicator will be negative.
CFD Technical Analysis & Generating CFDs Signals
Buy CFD Signal
A crossover of above zero signifies accumulation of a cfd. A value of above +10 is a buy/bullish trading signal. Values above +20 signify a strong upwards trending market.
Buy CFDs Signal
Sell CFD Signal
A Zero line cross of below zero signifies distribution of a cfd. A value of below -10 is a short/sell 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 cfd price breaks an upward cfd trend line, CFD traders should then wait for a confirmation signal from the indicator values of below -10.
CFD Trend-Line Break - Sell CFD Signal
If cfd price breaks an downward cfd trend line, CFD traders should then wait for a confirmation signal from indicator values of above +10.
CFD Trend-Line Break - Buy CFD Signal
Divergence CFD
A divergence between this indicator and cfd 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 trading signal forms when price makes lower low while the Chaikin Money Flow makes higher low.
A bearish divergence signal occurs when price makes higher high while the Chaikins Money Flow indicator makes lower high.
