Chaikin Money Flow (CMF)

Chaikin Money Flow (CMF)

Chaikin Money Flow (CMF) is an indicator that measures the buying and selling pressure by evaluating volume over a period. Technical analysts use this indicator to confirm trends and estimate the strength of a trend. KEEV makes it easier for you to utilize this indicator. 


In This Article -

  1. What is the Chaikin Money Flow (CMF)? 
  2. How To Analyze the Chart Using Chaikin Money Flow (CMF)?
  3. How To Use Chaikin Money Flow (CMF) on KEEV?

Category – Volume


Type – Lagging


What is the Chaikin Money Flow (CMF)?


CMF is a technical indicator that helps you determine the buying or selling pressure of the market. It measures the volume of flow of money over a particular time frame. The standard period considered to calculate the CMF is 21 days.


The concept of CMF indicator is derived from accumulation and distribution. When the closing price is nearing the high, it is an accumulation. Conversely, When the opening prices are nearing the low, it is a distribution. 


CMF is often used to confirm trends, measure trends' strengths, or gauge their developments.


You can calculate the BOP by using the formula below:


Chaikin Money Flow (CMF) = Average Money Flow (21 days)

                                                               Average Volume (21 days)


How to analyze a chart using the Chaikin Money Flow (CMF)? 


You can identify and analyze the CMF using the chart shown.

As you can see in the above chart, the CMF are fluctuating above and below zero.


While the Volume is increasing, if the price action closes above 0, the CMF turns positive. It indicates that the market is strong.

And when the price action closes below 0, the CMF turns negative. It indicates that the market is weak.


After developing an overbought zone, if the CMF diverges with a lower high, it indicates a sell signal. 

Conversely, after developing an oversold zone, if the CMF diverges with a higher low and begins to rise, it indicates a buy signal.




    • Related Articles

    • Money Flow Index

      Overview – The Money Flow Index is an indicator that computes the flow of money into and out of security during a specific period. It is measured by positive and negative Money Flow Values which creates a money ratio. The Money Ratio is later on ...

    • Volume Indicators

      Introduction Volume analysis helps us to study the number of stocks traded or futures contracts traded during a specific time. This volume analysis is undertaken by using volume indicators. This article will give you a brief understanding of the ...

    • What is Virtual Trading & How does it work ?

      Virtual trading also known as paper trading is the general term for stock market trading where no real money is required to be invested and the setting is entirely virtual. The genuine stock market environment is different from this virtual setting. ...

    • What is positional trading - pros & cons, who is it suitable for -

      Positional trading is the practice of buying an investment by the trader in the long-term expectation that its value would rise. This type of trader is less disturbed by short-term price swings and the day's news until they alter the trader's ...

    • What is intraday trading? Pros & Cons, who is it suitable for

      Intraday trading (within the day trading) describes the business activity carried out by an individual or trader within a certain day's market hours. The main goal of intraday trading is to identify stocks, commodities, ETFs, derivatives, currencies ...