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Learn How to use the Chaiken Money Flow & Oscillator Trading Indicator

Since both Chaikin Money Flow and Oscillator rely on the Accumulation Distribution line discussed in the article published November 29, 2016, it is worth reviewing here. The Accumulation/ Distribution line is designed as a momentum oscillator, and is best used on daily, weekly and monthly stock charts, in conjunction with volume. When there is strong buying pressure with high volume, this pushes the indicator higher and strong selling pressure with reduced volume pushes the indicator lower. The Accumulation/ Distribution line either reaffirms the trend or gives a warning that the trend is about to change direction. As prices continue higher with the Accumulation/ Distribution line pointing lower, this suggests selling pressure (distribution) which could forecast a trend change in the underlying market. When prices trend down, and the A/D line points up, this suggests buying pressure (accumulation) and is a bullish reversal signal for the underlying market.

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