What is the Chaikin Money Flow Indicator?ChaikinMoneyFlow:QuantifyTrendStrength&MarketPressure×CloseWehopeyouenjoyreadingthispost.Doyouwanttotakeyourtradingtothenextlevel?DayTradeTheWorld™»TradingBlog»ChaikinMoneyFlow:QuantifyTrendStrength&MarketPressureTherearehundredsofindicatorsyoucanusetotradeinthefinancialmarket.Aswehavenotedbefore,theseindicatorsaredevelopedusingcomplexmathematicalcalculations.Inthepastfewweek,wehavelookedatindicatorsliketheRelativeStrengthIndex(RSI),Momentum,andBollingerBands.Thisweek,wewilllookattheChaikinMoneyFlow(CMF)indicator,whatitisandhowtouseitinthefinancialmarket.PageContentsWhatistheChaikinMoneyFlowIndicator?CMFFormulaBestwaytoReadtheChaikinMoneyFlowHowtoUsetheChaikinIndicatorCMFPracticalExampleUsingtheChaikinMoneyFlowindaytradingWhatistheChaikinMoneyFlowIndicator?TheCMFisanindicatorthatwasdevelopedbyMarcChaikin(aswellastheChaikinoscillator).Theindicatormeasurestheamountofmoneyflowoveraperiodoftime.Theindicatoristhefoundationoftheaccumulationanddistributionindicator,whichwelookedatbefore.TheCMFindicatorisfoundasadefaultintheMetaTradertradingsoftware.Whenapplied,theindicatorisusuallyalinethatmovesupandbelowthecentreline.Thegeneralideaoftheindicatoristhatitsumsthemoneyflowvolumeforaspecificperiod.Whenappliedonachart,theChaikinMoneyFlowisasinglelinethatmovesupanddown.Indeed,ithasacloseresemblancetotheA/Dindicator.Inthechartbelow,theCMFisshowningreenwhiletheA/Disshowninred.Therefore,ifyouknowhowtousetheA/Dline,theCMFwillbeaneasytouseindicator.CMFFormulaTheChaikinMoneyFlowindicatorisrelativelyeasytocalculate.Thefirststageistocalculatethemoneyflowmultiplier.Youcalculatethismultiplierbyusingthefollowingformula.((Close–Low))–(High–Close))/(High–Low)Thenextstepistocalculatethemoneyflowvolume.Thisiscalculatedbymultiplyingthemoneyflowmultiplierabovewiththevolumeofthatperiod.Finally,youcalculatetheCMFbydividingtheperiod’ssumofmoneyflowvolumewiththeperiodsumofvolume.Asatrader,youneedtoselecttheperiodyouwilluse.Inmosttradingplatforms,thevolumeused