Forex reversal indicator v3c need both CMF_v1 and CMF_T3_v1 for CMF_T3_v1 to load properly. Marc Chaikin, a stockbroker since 1966. Default CMF period – 21 day.
While market weakness is often accompanied by the price closing in the lower half of its daily range on increased volume as well. Therefore, if price consistently closes in the upper half of its daily range with increased volume, then the CMF indicator will be reading above zero – positive CMF, which suggests that the market is strong. And vise verse: if the price consistently closes in the lower half of its daily range with increased volume, then the CMF indicator will be reading below zero – negative CMF, which indicates that the market is weak. Note, the zones has been colored for the illustration purposes only. CMF above zero – bullish signal – the indicator shows signs of buying pressure – accumulation.
CMF below zero – bearish signal – the indicator shows signs of selling pressure – distribution. So, you’ll be looking to Buy when CMF is above zero, and Sell when it’s below. Another way to examine the indicator is to look at the intensity of the Chaikin Money Flow readings. For example, CMF readings above 0. 10 would be significant enough to guarantee a bullish signal.
25 would be an indication of a really strong buying pressure. For example, if price has recently broken an uptrend line, to confirm it CMF will cross below its zero line after some time, showing that the market is ready to Sell. Note, that CMF is a lagging indicator, thus it would take time to confirm a signal, which would suite conservative traders, but may not impress more aggressive traders. A divergence between price and Chaikin Money Flow indicator can give early signals about underlying weakness of the move. A situation in which the price reaches new highs and the CMF Oscillator does not reach its new high creates a bearish divergence when the selling pressure begins to grow. This warns traders about a possible reversal ahead. It’s similar to MACD divergence, therefore please follow the link to read more.
Hello, thanks for all of your info it truely is one of my favorite websites. I have a breakout ea that trades the breakouts of the donchian channel what other indicator would be good to use for confirmation of a solid break. I looked at this one but it lags. Thinking of adx maybe just a confirm above 20. I tried pasting it on MT4 editor but could not display. I have contacted the developer directly and informed him about the issue. CMF_T3_v1 calls CMF_v1 to get information.