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Chaikin Money FlowCMF

Chaikin Money Flow measures buying and selling pressure by summing money flow volume over a set period, usually 20 or 21 days, and dividing by total volume. It swings above and below zero: positive suggests accumulation, negative suggests distribution.

Did the stock close near the top of its range on big volume, or near the bottom? Chaikin Money Flow turns that question into a single line. By weighting volume according to where each period closes, it shows whether money is flowing into or out of an asset. This entry explains the calculation, how to read the zero line and how CMF relates to the Accumulation/Distribution Line.

Category
Indicators and Tools
Reading time
4 min
Also called
Chaikin Money Flow indicator, CMF indicator
Updated

Chaikin Money Flow in plain words

Developed by Marc Chaikin, CMF measures how much money flows into an asset over a set period.1

It adds up money flow volume over a look-back, typically 20 or 21 days, and moves above and below a zero line like an oscillator.1

The same money flow volume, kept as a running total instead, forms Chaikin's Accumulation/Distribution Line.2

How CMF is calculated, step by step

  1. Money flow multiplier

    [(Close − low) − (high − close)] ÷ (high − low), from −1 to +1.

  2. Money flow volume

    Multiplier × the period's volume.

  3. Sum over 20 periods

    Add up the money flow volume.

  4. Divide by total volume

    20-period money flow volume ÷ 20-period volume.

  5. Read the sign

    Above zero = buying pressure; below = selling pressure.

  6. Watch zero crosses

    They can mark changes in money flow.

Worked examples

Example 1 — A strong close

Buying pressure

High $50, low $46, close $49.50, volume 200,000.

Example 1 — A strong close — calculation
Multiplier[(49.5 − 46) − (50 − 49.5)] ÷ 4 = 0.75
Money flow volume0.75 × 200,000 = 150,000

The multiplier is applied to each period's volume to get its money flow volume.1

Example 2 — The CMF value

CMF +0.20

Over 20 days, money flow volume totals +1.2 million and total volume is 6 million.

Example 2 — The CMF value — calculation
CMF1.2m ÷ 6m = +0.20

Chartists weigh buying versus selling pressure by the absolute level of CMF.1

Example 3 — A cross below zero

Money flowing out

CMF falls from +0.05 to −0.08 as price stalls near resistance.

Example 3 — A cross below zero — calculation
Before+0.05
After−0.08

Crosses below the zero line can flag a shift toward selling pressure.1

CMF vs Accumulation/Distribution Line

AspectChaikin Money FlowA/D Line
CalculationSum over a fixed periodRunning total
DisplayOscillates around zeroUnbounded line
Best forCurrent pressureLong-term flow trend
CreatorMarc ChaikinMarc Chaikin

How traders use CMF

  • Confirming breakouts

    Positive CMF supports an upside break. See Breakout Trading.

  • Spotting divergence

    Price rises while CMF falls. See Divergence.

  • Accumulation and distribution

    Persistent readings hint at big buyers or sellers. See Accumulation and Distribution.

  • Multiple time frames

    Comparing 20- and 60-day CMF.1

Advantages and disadvantages

Advantages

  • Combines price location and volume.
  • Clear zero line.
  • Works well for confirming trends.

Disadvantages

  • Ignores gaps between periods.
  • Needs reliable volume.
  • Zero-line crosses whipsaw in ranges.

Going deeper

Read as far as you need. Each level builds on the one before it.

Close location matters

Beginner

A close at the high gives a multiplier of +1 and a close at the low −1; a close in the middle gives zero. Volume is then weighted by that score.

Cumulative cousin

Intermediate

Chaikin first called the running-total version the Cumulative Money Flow Line; it became the Accumulation/Distribution Line.2

Gap blindness

Advanced

Because the multiplier only looks within each bar, a stock that gaps down but closes near its high scores as buying pressure. Check price action alongside CMF. See Price Gap.

Common mistakes

  1. Trading every zero cross

    Small crosses are often noise.

  2. Ignoring gaps

    CMF can misread gap days.

  3. Using poor volume data

    Results depend on accurate volume.

  4. Using it alone

    Confirm with price structure.

Check your understanding

Test yourself before moving on. Each answer comes with an explanation.

Q1High $30, low $28, close $28.50. What is the money flow multiplier?
Q220-day money flow volume −900,000; total volume 3,000,000. What is CMF?

Key points to remember

  1. CMF measures money flowing into or out of an asset.
  2. It sums money flow volume over 20 or 21 periods.
  3. Above zero suggests buying, below zero selling pressure.
  4. It is the period version of the A/D Line.
  5. It ignores gaps, so check price action too.

Frequently asked questions

What is a good CMF reading?

Readings persistently above +0.05 to +0.10 suggest steady buying; below −0.05 to −0.10 steady selling.

What period does CMF use?

Usually 20 or 21 days, roughly one trading month.

Is CMF the same as MFI?

No. MFI uses changes in typical price in an RSI formula; CMF uses where each bar closes within its range.

Further learning

Sources

This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.

  1. StockCharts ChartSchool. Chaikin Money Flow (CMF) (opens in a new tab) Checked .
  2. StockCharts ChartSchool. Accumulation/Distribution Line (opens in a new tab) Checked .

Read more elsewhere

Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.