Chaikin Money Flow (CMF): Calculation and How to Read It

What Chaikin Money Flow measures

Chaikin Money Flow (CMF) measures buying and selling pressure over a fixed window by asking where each session closed within its range and weighting the answer by volume. Marc Chaikin, who also developed the accumulation/distribution line, created it in the early 1980s. Where the A/D line keeps a running total from the first bar, CMF looks only at the last n sessions and expresses the result as a ratio.

The ratio has no units and stays between -1 and +1, because no session’s multiplier can exceed 1 in either direction. That makes CMF easier to compare across stocks and over time than the A/D line, although thinly traded stocks still swing more.

Chaikin Money Flow calculation

CMF reuses the money flow multiplier of the A/D line. It adds up money flow volume over the window and divides by the total volume of the same sessions.

Money flow multiplier = ((Close - Low) - (High - Close)) / (High - Low)
Money flow volume = Money flow multiplier × Volume
CMF(n) = Sum of money flow volume over n sessions / Sum of volume over n sessions

Two divisions can fail. A zero-range session, with its high equal to its low, has no defined multiplier; the usual convention sets it to 0 while its volume still counts in the denominator. A window in which no shares traded has no defined CMF, because its total volume is 0.

Chaikin money flow lookback periods

The standard window is 21 sessions, about one trading month, and many platforms default to 20. Shorter windows, such as 10 sessions, react faster and cross zero more often; longer ones, such as 50 sessions, change slowly and describe a broader period. The first value needs n sessions, and every later value adds the newest session as it drops the oldest.

That drop-off matters when reading the line. CMF can change sharply on a quiet day if a heavy-volume session from the start of the window leaves it.

Chaikin money flow accumulation example

The five-session windows below keep the arithmetic short; the method is identical with 20 or 21 sessions. In the first hypothetical window, most closes finish near the top of their ranges and the heaviest volume arrives on strong closes.

One session closes in the lower half of its range (session 3, multiplier -0.500), but it carries the lightest volume of the window, so it barely dents the sum. The window’s CMF is 0.45.

Chaikin money flow distribution example

In the second window, closes cluster near the lows on heavier volume. Notice that the closing price still rises from $44.80 to $45.30 across the window: CMF tracks where sessions close within their ranges, not whether the stock went up.

Session 5 of this window closes exactly at the midpoint of its range, so its multiplier is 0 and its 900,000 shares only enlarge the denominator.

Chaikin money flow zero line explained

Zero divides volume-weighted closes in the upper half of their ranges from those in the lower half. Above zero, money flow volume on strong closes outweighs that on weak closes during the window; below zero, the reverse. A cross of zero means the balance has shifted, which can come from new sessions entering the window or from old ones leaving it.

Readings close to zero, such as between -0.05 and +0.05, describe a nearly even balance and change sign easily. Some chart readers wait for readings further from zero before treating the balance as clear; such thresholds are conventions, not measured cutoffs.

How to read Chaikin money flow on a stock chart

Place CMF below price with a horizontal line at zero. Compare its sign with the trend: an advance with CMF mostly above zero has had strong closes on volume, while an advance with CMF below zero has been carried by weak closes. Then look for divergences, such as price setting a new high while CMF peaks lower.

• Persistence matters more than one reading: weeks on one side of zero describe a pattern, while a single cross may not.
• Find the largest volume bar in the window; one session can dominate the ratio.
• The illustration in this guide shows CMF falling below zero while price keeps edging higher, because the later sessions close weakly.
• Compare with the accumulation/distribution line, which is the cumulative version of the same ingredient.

Limitations of Chaikin money flow

CMF shares the blind spots of the money flow multiplier and adds the effects of a fixed window. Read it with these limits in mind.

• It ignores gaps between sessions: a gap up that closes near the session low counts as selling pressure.
• It ignores the size of price moves, only where each close sits in its range.
• The fixed window creates drop-off effects when a large session leaves it.
• In thinly traded stocks, a few sessions dominate the sums and the ratio swings widely.
• Accumulation and distribution are names for the arithmetic, not verified buying or selling by any group of investors, and the ratio does not forecast the next session.

Data cadence and where to study the inputs

CMF is usually computed on daily bars, with n counted in sessions and one new value after each close. On weekly bars, 21 periods cover about five months. TradeClever’s Stock Charts do not plot CMF; they show the daily candles and volume pane that reveal where sessions closed and how heavy they were. To find stocks with unusually heavy recent volume to study, see unusual volume stocks.