
Chaikin money flow's primary purpose is to distinguish between periods of accumulation and distribution of a security. When the indicator is above the zero line, it indicates the security is experiencing net accumulation, suggesting that investors are buying the asset.
- Chaikin Money Flow settings with values over 30 make the indicator less sensitive. This will result in fewer, but better quality signals.
- Chaikin Money Flow settings with values below 20 make the indicator over-sensitive. This will result in more market noise.
- It indicates a continued uptrend when the CMF indicator crosses the zero line from above and generates long/buy signals.
- It indicates a continued downtrend when the CMF indicator crosses the zero line from below and generates short/sell signals.
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