How it is calculated
A bar's money flow volume is its close location, ((close minus low) minus (high minus close)) divided by (high minus low), times its volume, and 0 on a bar with no range. CMF is the sum of money flow volume over the length divided by the sum of volume over the same bars (Chaikin). The first value is at bar length minus 1; a window that traded no volume has no value.
Reference: Chaikin money flow (Chaikin)
How to read it
Above zero the closes have leaned toward the highs on the volume traded, below zero toward the lows. The further from zero, the clearer the pressure; values close to zero say little. As a ratio it compares across markets better than the A/D line, though on forex the volume is tick volume.
In a strategy
As a filter: only take longs while ctx.ind("cmf", length=20) is above zero, or close a long when it turns negative.
Inputs
| Input | Type | Default | Range or choices |
|---|---|---|---|
Lengthlength | Whole number | 20 | min 1, max 5000 |
What it draws
| Line | Drawn as |
|---|---|
| CMF | Line |
Guide lines at 0.
Used in
No strategy template reads it yet.