Chaikin Money Oscillator

The Chaikin Oscillator is, at its core, an indicator of an indicator. The Chaikin Oscillator takes Accumulation/Distribution (ADL) and applies two Exponential Moving Averages of varying length to the line. The Chaikin Oscillator's value is then derived by subtracting the longer term EMA of the ADL from the shorter term EMA of the ADL. Ultimately this serves as a way to measure the momentum of the ADL by plotting a line which fluctuates between positive and negative values. Being aware of changes in momentum can help a trader or technical analyst to anticipate trend changes since changes in momentum often precede changes in trend.

View of indicator on the chart:

Calculation:

There are four steps in calculating The Chaikin Oscillator (This example is for a (3,10) Period):

1. Find the Money Flow Multiplier
[(Close - Low) - (High - Close)] /(High - Low) = Money Flow Multiplier

2. Calculate Money Flow Volume
Money Flow Multiplier x Volume for the Period = Money Flow Volume

3. Determine ADL
Previous ADL + Current Period Money Flow Volume = ADL

4. Apply EMA (user defined periods) to the ADL to generate the Chaikin Oscillator
(3-day EMA of ADL) - (10-day EMA of ADL) = Chaikin Oscillator

To add and configure the indicator, you must open the settings window.

Drawing

Panel - select the location indicator on the chart:

  • New panel
  • Chart

Oscillator

Show value - display the value of the indicator on price scale.

Show zero values- display zero values.

Scale - if this option is enabled, the scale will automatically be calculated based on the minimum and maximum values of the indicator, in order for the indicator to be placed on the graph.

Color - choose color.

Visual type - visual adjustment of the indicator on the graph:

  • Line
  • Histogram
  • Hash
  • Block
  • Cross
  • Square
  • Dots
  • Up arrow
  • Down arrow
  • Axis label
  • Hide

Line style - customize the appearance of the line:

  • Dot
  • Solid
  • Dash
  • Dash - dot
  • Dash - dot - dot

Width - adjust the thickness of the indicator line.

Misc

Long Period - choose value of period in days.

Short period - choose value of short period.

Show description of indicator - turn on and off description.