Chaikins Money Flow Analysis & Money Flow Signals
Conceived and Engineered by Marc Chaikins
This is an oscillator that quantifies the flow of money accumulating or being distributed in and out of a xauusd asset.
The indicator is predicated on the principle that when the closing price is closer to the high, there is an increased accumulation of xauusd.
The closer the close price is to the low, the more selling pressure on XAUUSD.
The Chaikin Money Flow will indicate a positive value if the market trading price consistently closes above the midpoint of the bar, accompanied by increasing volume.
But, if the price constantly ends lower than the bar's middle with more action, then the sign will be seen as bad.
Gold Analysis and Generating Signals
Buy Signal
A crossover above zero shows XAUUSD accumulation. Over +10 signals a buy. Above +20 means a strong uptrend.
Buy Signal
Sell XAU/USD Signal
A crossover originating below the zero line suggests profit-taking activity in the xauusd pair. A reading below the -10 threshold serves as a short/sell alert, and values dipping below -20 signal a distinctly strong bearish market.
Sell Signal
Trendline break with Chaikin's money Flow
The cash waft can be used to verify trendline breaks out or aid/resistance level breaks out.
Should the trading price breach an ascending trendline, traders are advised to await a confirmation signal derived from indicator readings below the -10 threshold.
TrendLine Break
If the price breaks a downtrend line, wait for a confirmation from indicators reading over +10.
Trendline Break
Divergence Gold
When this indicator diverges from price, a trend shift may come. Wait for a confirm signal before trading the setup.
A bullish divergence forms when the price drops to a new low, but the Chaikin Money Flow rises to a higher low.
A bearish divergence occurs when price hits a higher high, but Chaikin Money Flow drops to a lower high.
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