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$tockfather

02/01/12 11:54 PM

#9664 RE: IAMLEGEND #9654

GOODFELLAS PLEASE CHECK OUT IAMLEGENDS LESSON OF THE DAY STICKY POSTS!

They are very informative and educational. Read through them good and you will gain much more knowledge on chart TA, i promise. He doesn't have to do any of this but I'm grateful that he does. I thank him for his help and hard work around the GoodFellas board.

GoodFellas make sure to member mark him, it is much deserved....


Keep up the great work, many thanks my friend;-)

IAMLEGEND

02/05/12 12:18 AM

#11073 RE: IAMLEGEND #9654

IAMLEGEND LESSON OF THE DAY!!! ~CMF INDICATOR~

~~link back for previous lessons~~

Chaikin Money Flow
measures the amount of Money Flow Volume over a specific period. Money Flow Volume forms the basis for the Accumulation Distribution Line. Instead of a cumulative total of Money Flow Volume, Chaikin Money Flow simply sums Money Flow Volume for a specific look-back period, typically 20 or 21 days. The resulting indicator fluctuates above/below the zero line just like an oscillator. Chartists weigh the balance of buying or selling pressure with the absolute level of Chaikin Money Flow. Chartists can also look for crosses above or below the zero line to identify changes on money flow. Positive CMF would confirm an uptrend, but negative CMF would call into question the strength behind an uptrend. The reverse holds true for downtrends.





Generally, buying pressure is stronger when the indicator is positive and selling pressure is stronger when the indicator is negative.



Divergence

Divergence can show up in the indicator when the chaikin money flow indicator makes a higher high, while the price action makes a lower low. This implies that there is less selling pressure pushing the security lower, thus a bounce is in order.



~CMF VIDEO~

http://www.yourepeat.com/watch/?v=7CoPhf0eKDQ


EXAMPLES








Conclusions

Chaikin Money Flow is a good oscillator and it is easy to understand for those who want to study buying and selling pressure of a stock. Its core philosophy is that money flow is bullish when the CMF is positive and the bearish when the CMF is negative. Divergences between the CMF indicator and prices can alert traders that current sentiment is about to change. The Chaikin Money Flow indicator is unique in that it uses price and volume in its analysis as opposed to using only price or volume alone. By incorporating both, the CMF provide analyst with a different perspective than most other indicators. Like many other oscillators, traders can improve their performance by using the CMF in conjunction with other indicators, such as the RSI. Overall the Chaikin Money Flow indicator is a good tool for identifying buying and selling pressure.