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Chaikin Money Flow (CMF)

What Chaikin Money Flow measures, its range from −1 to +1, how to read the zero line, its settings on MillionChart and an example on gold.

Chaikin Money Flow measures buying and selling pressure over a window of candles: the volume of the last 20 candles, weighted by where each candle closed in its range, divided by the total volume of those candles. It runs from −1 to +1. Above zero the window's closes have leaned toward the highs (money flowing in); below zero, toward the lows. Marc Chaikin devised it as the windowed form of his A/D line.

Chaikin Money Flow (20) under gold, daily candles
Chaikin Money Flow (20) under gold, daily candles

What it shows#

  • CMF — a gold line in its own pane, between −1 and +1. Positive and rising: buying pressure building; negative and falling: selling pressure. In practice it rarely leaves the band between −0.5 and +0.5.
  • Zero — a dotted line. Which side CMF sits on, and for how long, is the main reading.
  • Three decimals are shown, because typical readings are small, around 0.1 to 0.3.

How it is calculated#

For each candle, the money flow multiplier = ((close − low) − (high − close)) / (high − low): +1 for a close at the high, −1 at the low, 0 when the high equals the low. The money flow volume is that multiplier times the volume. CMF = Σ(money flow volume over Length candles) / Σ(volume over the same candles). It needs Length complete candles before its first value and has no value where the window's volume is zero.

How traders use it#

  • Sign: CMF above zero for a sustained stretch (several weeks on daily candles) supports an uptrend; below zero, a downtrend. A brief flicker across zero is noise.
  • Strength: readings above about +0.25, or below −0.25, are taken as strong pressure. They confirm a trend; they are not overbought or oversold readings.
  • Divergence: price at a new high with CMF lower than at the previous high says the closes behind the new high were weaker.
  • Breakout check: a breakout from a range with CMF turning clearly positive is more trustworthy than one with CMF near zero.
  • Watch out for: a gap counts only by the candle's own range, so gaps are not seen; the window drops old candles abruptly, so CMF can jump when a big candle leaves it; on gold and forex it is tick volume.

Settings#

SettingDefaultWhat it changes
Length20Candles in the window — the usual textbook length; 21 is also common. Longer is smoother and slower.
Colours and style—CMF (the line) and Zero line; width and visibility under Lines in the Inspector.

Example on gold#

Suppose gold on daily candles has traded sideways between $4,260 and $4,320 for a month while CMF has crept from −0.05 to +0.18: the closes inside the range are drifting toward the highs. For example, a trader reads this as accumulation and prepares to buy a daily close above $4,320, with a stop under $4,255.

What invalidates it: CMF falling back below zero before the break; or a breakout candle on which CMF barely moves — the break then lacks the pressure behind it, and the trader waits for a retest instead.

Add it to your chart#

  1. Click Indicators in the top strip (on the Pro screen, press I).
  2. Type cmf and click Chaikin Money Flow, or press Enter for the first result.
  3. Click its chip in the legend to open the Inspector and change the settings; drag the chip to reorder; the dot hides it; × removes it.