Description: Chaikin Money Flow was an indicator that measuring of the volume-weighted average of accumulation and distribution over a specified period (as cited from Fidelity) developed by Marc Chaikin, aim to identify the changes in buying or selling momentum of an asset that leads to the increase or decrease of asset prices. In the original format, the cross above 0 of money flow depicts a buying pressure, while a cross under 0 means a selling pressure. In this indicator, the money flow was displayed in a swami chart, used for detecting a change not only in one specified period but instead in multiple periods at once. Sequencing from the very below, the indicator capture the shift in money flow in shorter lookback periods, going through the very above the indicator capture the change of money flow in greater lookback periods. The color is set to gradient from red as indicating the negative money flow, while green indicates a positive money flow. A smoothing function was given (from Ehlers smoothing function) to reduce noises.
Money Flow: cmf = n-day sum of( (((close - low) - (high - close)) / (high - low)) x volume )/ n-day sum of volume smoothed = (4*cmf + 3*cmf[1] + 2*cmf[2] + cmf[3])/10
Notes:
the Darker the color indicates the higher the value e.g. dark red means more selling pressure, and vice versa
if the color is a lineup in a one period, indicates a strong signal (both directions)
very below is for a shorter period, and increasing through to the longest (1 - 30 by default)
love it. Coming from having used Chaikin for pre-pumps before, it's good stuff. However, I have noticed from vumanchu Cipher B's MFI (measure of green n red bar body range), sometimes it shows false data cause of those low liquidity bars (bool oneLiner = o == h and o == l and o == c), ie it'll show massively bullish / bearish depending
palitoj_endthen
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@bangkokskater, hi, thank you very much, really appreciate it! However, I can't find for 'vumanchu Cipher B's MFI' you mentioned, thus I can't make a comparison to the improvement
this one rsiMFI = f_rsimfi(rsiMFIperiod, rsiMFIMultiplier, timeframe.period)
palitoj_endthen
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@bangkokskater, hi, thank you for sharing! from your explanation, I guess theres a bit of difference that you need to be concerned about CMF (Chaikin Money Flow) which is a base of this indicator to MFI (Money Flow Index). In regards to your first question about false data coming from a boolean of Open == High and Open == Low of a low liquidity bar, if I am right to address it, you need to be concerned about the color darkness in this regard, it states how magnify the momentum in both directions, aside to the line of continuation. I hope I can address your question well enough. Cheers.