What it is
Marc Chaikin designed CMF to show whether money is flowing into or out of a market. Each candle gets a score from minus 1 (closed on its low) to plus 1 (closed on its high). That score is multiplied by the candle's volume, and the total over 20 candles is compared with total volume.
So CMF is not just about price going up or down. A candle that rises but closes in the bottom of its range counts as selling pressure. For forex and CFDs, the volume used is usually tick volume, the number of price changes, which is a stand-in for real traded volume.
How it is calculated
1. Money flow multiplier for each candle = ((close minus low) minus (high minus close)) divided by (high minus low). It runs from minus 1 to plus 1. 2. Money flow volume = multiplier times the candle's volume. 3. Add up money flow volume over 20 candles. 4. Add up volume over the same 20 candles. 5. CMF = the first sum divided by the second.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| Length | 20 | 2 to 200 | Candles in the sums. Shorter reacts faster and crosses zero more often; 21 is also common because it is about a month of daily candles. |
How to read it
How to trade it
- 1
Mark a clear resistance level on a 1 hour US30 or gold chart.
- 2
When price closes above the level, check CMF(20). Only take the breakout if CMF is above zero or crosses above it on that candle.
- 3
Place the stop back inside the old range, below the breakout candle's low, for example 60 to 100 points on 1 hour US30.
- 4
Target the height of the range added to the breakout level.
- 5
Skip breakouts where CMF is below zero and falling, which suggests the move lacks support.
A breakout buy confirmed by CMF is proved wrong when price closes back inside the range or CMF drops back below zero and stays there for several candles.
WickSpeak runs in your browser with nothing to install. When you add Chaikin Money Flow, it writes a plain-English reading on the live candle: what the indicator is, what it is doing right now, how to trade it and what would prove that reading wrong. It says which side the money flow favours, how strong it is and whether it agrees with what price is doing.
In Playbook, our no-code strategy builder, Chaikin Money Flow can be a condition in a play. It can test whether Chaikin Money Flow: crosses above zero; crosses below zero; is above zero; is below zero; is rising; is falling. Each condition can run on any of 12 timeframes from 1 minute to weekly, combined with up to 11 others, and the play can be backtested on past candles with your own costs and turned into alerts on screen, by email or by phone push.
There is also a WickSpeak Chaikin Money Flow. Its line is coloured by strength: faint when the push is weak, glowing when it is strong, mint above zero and pink below it. Crosses of zero are marked only once the candle has closed, so a marker never appears and then vanishes mid-candle. A gold marker shows a stretched reading, meaning the strongest few percent of its own range or a reading past a fixed extreme level. Divergences between price and the oscillator are drawn on both the chart and the indicator, and a chip shows the same reading on a higher timeframe.
Best markets and timeframes
Most reliable on markets with real exchange volume, such as index futures and crypto, and on 1 hour to daily charts. On gold and forex CFDs it uses tick volume, so treat it as a supporting signal.
Common mistakes
- Assuming a rising price means CMF must be positive; weak closes can keep it negative.
- Trading every small zero cross when CMF is hovering close to zero.
- Forgetting that forex and CFD volume is tick volume, not traded contracts.
Works well with
Questions traders ask
What is a good Chaikin Money Flow reading?
Above zero shows buying pressure and below zero selling pressure. Readings above plus 0.25 or below minus 0.25 show strong, persistent pressure. Near zero means neither side is in control.
What is the difference between CMF and the Accumulation Distribution line?
They use the same money flow multiplier. The Accumulation Distribution line adds it up forever as a running total, while CMF only looks at a fixed window and divides by volume, so it moves around zero.
What is the best CMF setting?
20 or 21 periods is the standard. Shorter settings such as 10 react faster but give more false crosses.
Does Chaikin Money Flow work on forex?
It can, but forex has no central volume, so it uses tick volume, the number of price changes. That often tracks activity reasonably well, but treat it as supporting evidence rather than the main signal.