What it is
Marc Chaikin built the oscillator to make the A/D line easier to time. The A/D line drifts with no fixed scale; the oscillator shows whether it is turning up or down right now, centred on 0.
It is used for zero-line crosses in the direction of the trend, and for divergences where price and volume pressure disagree. On gold and index CFDs it is built on tick volume.
How it is calculated
1. Build the Accumulation/Distribution line: a running total of volume x ((close minus low) minus (high minus close)) / (high minus low). 2. Take a 3 period EMA of the A/D line. 3. Take a 10 period EMA of the A/D line. 4. Chaikin Oscillator = the 3 EMA minus the 10 EMA.
Settings
| Setting | Default | Range | What it changes |
|---|---|---|---|
| Fast | 3 | 1 to 100 | The short EMA of the A/D line. Lower is quicker to show a change in pressure. |
| Slow | 10 | 2 to 200 | The long EMA of the A/D line. Higher makes zero crosses less frequent. |
How to read it
How to trade it
- 1
Confirm the trend on a 4 hour gold chart, for example above its 50 EMA.
- 2
On the 1 hour chart, wait for the oscillator to dip below 0 in a pullback.
- 3
Enter long when it crosses back above 0 and the candle closes above the previous candle's high.
- 4
Stop below the pullback low, for example 8 to 12 points on 1 hour gold.
- 5
Target the last swing high or 2 times the stop.
The long is cancelled if the oscillator drops back below 0 within two candles, or price closes below the pullback low.
WickSpeak writes a plain-English reading of the Chaikin Oscillator on the live candle: what it is, whether buying or selling pressure is building now, how to trade it and what would prove it wrong. In Playbook, a condition can check when the oscillator crosses above or below zero, stays above or below zero, or is rising or falling.
Best markets and timeframes
Most useful on 1 hour to daily charts. On gold, indices and forex CFDs it rests on tick volume, so use it as supporting evidence rather than a lone trigger.
Common mistakes
- Confusing it with Chaikin Money Flow, which is a different calculation.
- Taking zero crosses against the main trend.
- Ignoring that the scale is in volume units, so values cannot be compared across markets.
Works well with
Questions traders ask
What are the Chaikin Oscillator settings?
The standard settings are a 3 period and a 10 period EMA of the Accumulation/Distribution line. WickSpeak uses these as defaults.
What is the difference between the Chaikin Oscillator and Chaikin Money Flow?
Chaikin Money Flow sums money flow volume over 20 candles and divides by total volume, giving a value between -1 and +1. The Chaikin Oscillator is the gap between a fast and slow EMA of the A/D line, so it shows momentum of the flow.
What does a Chaikin Oscillator cross above zero mean?
It means the short-term average of the A/D line has moved above the longer one, so accumulation is speeding up. Traders read it as buying pressure building.
Does the Chaikin Oscillator work on gold?
Yes, using the tick volume your broker supplies. It works best on 1 hour and higher charts, paired with a price signal.