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Indicator Guide > Money Flow > Chaikin Oscillator
Indicators A ~ Z > Indicators A ~ C > Chaikin Oscillator
Contents > Indicators A ~ C > Chaikin Oscillator
Money Flow & Volume > Money Flow > Chaikin Oscillator
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Chaikin Oscillator

Marc Chaikin uses the Chaikin Oscillator to monitor the flow of money in and out of the market - comparing money flow to price action helps to identify tops and bottoms in short and intermediate cycles. He suggests that it be used in conjunction with a 21 day price envelope and an overbought/oversold indicator (such as Momentum or RSI).

The Chaikin Oscillator is calculated by subtracting a 10 period exponential moving average from a 3 period exponential moving average of the Accumulation Distribution line.

Trading Signals

The best signals are divergences:

  • Go long on a bullish divergence.
  • Go short on a bearish divergence.
Example

Microsoft Corporation with  Price EnvelopesPrice envelopes (at 10% around a 20 day exponential moving average) and  Chaikin Oscillator Chaikin oscillator.

Microsoft Chaikin Oscillator

Mouse over chart captions to display trading signals.

  1. Go long [L] on bullish divergence.
  2. Go short [S] on bearish divergence.
  3. Go long [L] on bullish divergence. This position is stopped out when price falls below the recent low.
  4. Bullish triple divergence. Re-enter long position [L].
  5. Go short [S] on bearish divergence.

Setup

See Indicator Panel for directions on how to set up Chaikin Oscillator. The default exponential moving averages are:

  • slow - 10 days
  • fast - 3 days

To alter the default settings - Edit Indicator Settings.



 
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