An indicator measuring where the candle closed within its range, weighted by volume over twenty sessions. Above zero means accumulation (quiet institutional buying), below it means distribution (gradual selling).
What it measures
Chaikin Money Flow (CMF · Chaikin Money Flow) measures institutional buying pressure with one smart question: where do candles close within their range? A close near the high on heavy volume means buyers pushing until the bell, and a close near the low means sellers own the finish. It adds this up over twenty sessions and weights it by volume.
Reading its ranges
Positive, above zero: net buying pressure in the window, and the closer it gets to +0.25 the stronger the signal. Negative, below zero: net distribution. A narrow swing around zero means a balance not worth building on.
What sets it apart from simple volume counters
Where the close sits in the range catches what close direction alone misses. A green session that closed in its bottom third after a hard sell-off from the high counts as selling pressure here, while a simple counter reads it as full buying.
Hypothetical example
A stock rises for two weeks, but its closes slip from the tops of the candles to the middle, and the flow indicator slides from +0.2 toward zero: the rise looks intact while the institutional fuel is draining away. A divergence worth being careful about.
Common mistake
Ignore gaps: the measure is built on the session's own range, and a huge opening gap distorts the reading that day. Read it as an average and as context, not as a single session.
What sets it apart from other volume indicators
It weighs where the close sits within the candle's range and multiplies by volume, so it measures buying pressure, not just the presence of volume. A reading above zero means accumulation, below zero means distribution. The most useful signal is divergence from price: a rising price with a falling reading means the rally has no real buying pressure behind it.
Where to see it on the platform
It sits among the volume indicators in the quantitative analysis tools, and the Academy's indicators page explains it with divergence examples.
The technical chart shows it in the volume family, and it is read together with relative volume.
