Chaikin Money Flow (CMF)
Original schematic showing the guide's principal visual relationships.
Formula and components
A rolling measure combining where price closes within its range with period volume.
CMF = sum(Money Flow Multiplier × Volume) ÷ sum(Volume), commonly over 20 or 21 periods.
How it works
The indicator transforms price, range, or volume observations over a selected lookback. Shorter settings react faster but create more noise; longer settings respond more slowly and emphasize the underlying regime. Always compare the reading with price structure and timeframe.
How to read it
Values above zero suggest accumulation pressure and below zero distribution pressure; persistence matters more than one crossing.
Confirmation checklist
Confirm that participation supports the price move and compare like-for-like sessions. One unusual print or event-driven spike should not define the entire signal.
Limitations and false signals
Gaps are not directly represented by the close-location multiplier, and a few high-volume periods can dominate the window.