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If you use a hammer to cut wood and a saw to pound nails, of course the
results will be less than satisfactory. Chaikin's Money Flow, like
Comparative Strength and On-Balance-Volume, is an aid in stock selection,
not transaction timing. See TAS&C interviews with Mark Chaikin (Jan '94),
John Bollinger (Apr '97) and David Vomund (Oct '99). These three
interviews show a remarkable similarity of approach. In the Vomund
interview, Volume Accumulation Percent (VAP, VA%) is CMF under a different
name.
CMF is useful to the intermediate term investor (weeks to months). Plot it
as a histogram with different colours above and below the zero
line. Length of time (persistency) above zero, as well as the height of
the bars are indications of buying interest, since they indicate that the
price is regularly closing above its mid-point with decent volume. If a
stock is consolidating, in a trading range, or even drifting downwards,
positive CMF can indicate that accumulation is quietly taking
place. During a trend a strong CMF can give (some) confidence that the
trend will continue.
HHP
========================
At 05:02 PM 18/10/2003, you wrote:
>Curious how many people use Chaikin Money Flow as part of their
>analysis. If so, could you please pass along what is the "overall best"
>time period to use?
>
>I use dual SMA crossover to trade stocks, mostly SP 500 index stocks, with
>a time frame of 3 to 6 months from buy to sell or sell short to cover.
>
>Looking to enhance my trading and CMF seems like possible good indicator
>
>comments, info wanted!
>
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