Discussing the article: "How to build and optimize a volume-based trading system (Chaikin Money Flow - CMF)"
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Check out the new article: How to build and optimize a volume-based trading system (Chaikin Money Flow - CMF).
In this article, we will provide a volume-based indicator, Chaikin Money Flow (CMF) after identifying how it can be constructed, calculated, and used. We will understand how to build a custom indicator. We will share some simple strategies that can be used and then test them to understand which one is better.
The Chaikin Money Flow (CMF) is a technical indicator based on volume with considering the price action. It can be used alone or in conjunction with other tools to provide better insights, as we'll see. The (CMF) is an indicator developed by Marc Chaikin to monitor the accumulation and distribution of an instrument over a period of time. The main idea behind the CMF is that as the closing price gets closer to the high, there's been an accumulation. On the other hand, as the closing price gets closer to the low, it's a sign of distribution. A positive Chaikin Money Flow result is when the price action consistently closes above the bar's midpoint on rising volume. A negative Chaikin Money Flow result is when the price action consistently closes below the bar's midpoint on rising volume.
Author: Mohamed Abdelmaaboud