Description:
The Chaikin Oscillator is a versatile technical analysis tool traders and investors use to measure the accumulation and distribution of moving average convergence-divergence (MACD). Developed by Marc Chaikin, this oscillator helps identify potential buying and selling pressure in the market. It is particularly useful in predicting price reversals and confirming existing trends.
Input Parameters:
- Fast: Defined as the ‘shorter-term’ moving average.
- Slow: Defined as the ‘longer-term’ moving average.
Use Cases:
- Buy Signals: When the oscillator crosses above the zero line, it indicates that buying pressure is increasing, and a buy signal is generated.
- Sell Signals: When the oscillator crosses below the zero line, it suggests that selling pressure is growing, and a sell signal is generated.
- Divergences: The divergence between the price and CMF can also provide valuable trading signals. If the price reaches a new high, but the CMF fails to follow suit, this may indicate weakening buying pressure and a potential trend reversal. Similarly, if the price reaches a new low while the CMF does not confirm the new low, it may suggest diminishing selling pressure and a possible trend reversal.
This feature can be used in:
- Market Scanner
- Strategy Tester
- Multi-Factor Alerts
- Smart Checklist
Do you want to learn more? Check out our Learning Center Article.