Calculating Chaikin Money Flow from Price and Volume

Summary

This brief indicator note introduces Chaikin Money Flow (CMF) and gives its calculation from high, low, close, and volume data over a lookback window. For each bar, it weights volume according to where the close falls within that bar’s high-low range: closes near the high contribute positive money flow, while closes near the low contribute negative flow. CMF divides the summed money flow volume by summed volume over the chosen number of days.

The document identifies the needed inputs and names a threshold parameter, but it does not explain how to select that threshold or interpret CMF values as trade signals. It provides no performance tests, market examples, or caveats about implementation, including how to handle bars where the high equals the low. The material therefore supplies the indicator’s core formula but not a complete strategy or evidence that it predicts returns.

Key ideas

• CMF combines the close’s position within each bar’s range with that bar’s volume.
• The indicator aggregates money flow volume and total volume across a lookback window.
• The note lists high, low, close, volume, lookback length, and threshold as inputs.
• It does not specify trading rules, threshold selection, or empirical results.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.