Chaikin Money Flow
The chaikin money flow was developed by Marc Chaikin. It is calculated from the daily readings of the Accumulation/Distribution line.
According to the accumulation/distribution the amount of buying pressure can be determined by where the stock closed relative to its highs and lows. If the stock closed in the upper half of the trading range it is a bullish sign. If it closes in the bottom half of the trading range it is a bearish sign.
Using the Accumulation/Distribution line you can calculate the Chaikian money flow by using this formula.
(Total of Accumulation Distribution for 21 days)/ (Total volume for 21 days)
Below is how it appears on a chart.
When the indicator is positive it is bullish. When it is negative it is bearish. When it crosses over it can be a buy signal if it crosses to the positive or a sell signal if it crosses to the negative.
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