Browsed by
Tag: Trading Strategies

Chalkin Money Flow – Volume Strategy

Chalkin Money Flow – Volume Strategy

Chaikin Money Flow

Rising prices should be accompanied by rising volume, so this formula focuses on expanding volume when prices finish in their upper or lower portion of their daily range and then provides value for the corresponding strength. When closes are in the upper portion of the range and volume is expanding, the values will be high; when closes are in the lower portion of the range, values will be negative.

Chaikin money flow can be used as a short term indicator because it oscillates, but it is more commonly used for seeing divergence. Figure 6 shows how volume was not confirming the continual lower lows (price) in AAPL stock. Chaikin money flow showed a divergence that resulted in a move back higher in the stock

Read more: How To Use Volume To Improve Your Trading | Investopedia http://www.investopedia.com/articles/technical/02/010702.asp#ixzz4bb1vcjzc
Follow us: Investopedia on Facebook