[EquisMetaStock Group] Re: Chaikin Money Flow

[pumrysh <no_reply@xxxxxxxxxxxxxxx>]

Thanks Lionel,

The more I look at indicators and oscillators the more I realize that 
there's just so much that can be done with them. 

Preston


--- In equismetastock@xxxxxxxxxxxxxxx, "Lionel Issen" <lissen@xxx> 
wrote:
>
> Preston:
> 
>  
> 
> Thanks for your clarification of the Chaikin Money flow indicator. 
There are
> indeed many complicated indicators that give the same results as 
simpler
> ones or poor results.
> 
>  
> 
> Regards
> 
>  
> 
> Lionel.
> 
>  
> 
> From: equismetastock@xxxxxxxxxxxxxxx 
[mailto:equismetastock@xxxxxxxxxxxxxxx]
> On Behalf Of pumrysh
> Sent: Tuesday, May 13, 2008 2:38 PM
> To: equismetastock@xxxxxxxxxxxxxxx
> Subject: [EquisMetaStock Group] Re: Chaikin Money Flow
> 
>  
> 
> Andy,
> 
> The formula from Traders Online which was supposedly written by 
Equis 
> is:
> 
> {Chaikin Money Flow Indicator} 
> sum((((C-L)-(H-C))/(H-L))*V,21) / sum(V,21);
> 
> If you look at the formula closely what you see is that we are 
> multiplying ((C-L)-(H-C))/(H-L) by volume and then dividing by the 
same 
> volume. What you are left with is the close in relationship to the 
> trading range multiplied by one.
> 
> Compare these two indicators:
> 
> (C*V)/V;
> C;
> 
> The outputs will be identical.
> 
> We can safely say then that volume doesn't have an effect.
> The price of the stock shouldn't have an effect either,since we are 
> looking at the high, low, and close for the day.
> Gaps, will have a major effect on the range verses the previous 
range 
> and would move the indicator based on the value of the new range.
> 
> This indicator is all about the close in relationship to the range.
> 
> Hope this helps,
> 
> Preston
> 
> --- In equismetastock@xxxxxxxxxxxxxxx
> <mailto:equismetastock%40yahoogroups.com> , "metastkuser" 
> <andysmith_999@> wrote:
> >
> > Are there any cases where CMF is inaccurate (low volume stocks, 
stocks
> > under $10 etc.)?
> > 
> > The only case I know is when there is a gap up or down, the CMF 
gets
> > skewed since the midpoint is affected.
> >
>



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