Chaikin Money Flow
Chaikin Money Flow measures buying vs selling pressure by weighting volume with price position within the daily range.
What It Measures
Volume flow: whether money is flowing into (positive) or out of (negative) the asset.
The Math (Simplified)
Money Flow Multiplier = (Close-Low - (High-Close))/(High-Low) (-1..1), Money Flow Volume = Multiplier×Volume, CMF = Σ MFV(N)/Σ Volume(N). Near +1 = strong buying, near -1 = strong selling.
Default Inputs & Tuning
20 days is standard. CMF consistently above zero confirms bullish accumulation; below zero confirms distribution.
When It Works (Market Edge)
Confirming breakouts: a breakout on high CMF (buying pressure) is more reliable than one on negative CMF.
When It Fails
Divergences can persist: price can rise while CMF falls for long periods without reversing — divergence alone is not a timing signal.
Common Myths
Myth: Positive CMF always means price will go up.
Truth: CMF shows where volume is flowing, but price can still fall on low volume while CMF stays positive. It measures participation, not outcome.
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