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Chaikin Oscillator
Summary: The Chaikin Indicator applies MACD to the accumulation-distribution line rather than closing price.
What is the Chaikin Oscillator?
The Chaikin oscillator is named for its creator Marc Chaikin. The oscillator measures the accumulation-distribution line of moving average convergence-divergence (MACD). To calculate the Chaikin oscillator, subtract a 10-day exponential moving average (EMA) of the accumulation-distribution line from a 3-day EMA of the accumulation-distribution line. This measures momentum predicted by oscillations around the accumulation-distribution line.
A cross above the accumulation-distribution line indicates that market players are accumulating shares, securities or contracts, which is typically bullish.
How is the Chaikin Oscillator calculated?
- Calculate the Money Flow Multiplier (N).
- Multiply the Money Flow Multiplier (N) by volume to calculate Money Flow Volume (N).
- List a running total of N to draw the accumulation-distribution line (ADL).
- Compute the difference between 10 period and 3 period exponential moving averages to calculate the Chaikin oscillator.
Example of How to Use the Chaikin Oscillator
The purpose of the Chaikin oscillator is to identify underlying momentum during fluctuations in accumulation-distribution. Specifically, it applies the MACD indicator to accumulation-distribution rather than closing prices.
For example, a trader wants to determine whether a stock price is more likely to go up or to fall and MACD is trending higher. The Chaikin oscillator generates a bullish divergence when it crosses above a baseline. The baseline is called the accumulation-distribution line. A cross above that line indicates that traders are accumulating, which is typically bullish.
The Chaikin oscillator utilizes two primary buy and sell signals. First, a positive divergence is confirmed with a center-line crossover above the accumulation-distribution line. signaling a potential buying opportunity.. Second, a negative divergence is confirmed with a center-line crossover below the accumulation-distribution line., signaling a potential selling opportunity
A positive divergence signals a stock price is likely to rise, given the increase in accumulation. A negative divergence signals a stock price is likely to fall, given the increase in distribution.
Products, Properties & Examples
| Product Name | Product Variable | Properties |
|---|---|---|
| Chaikin Oscillator | chaikinOscillator | chaikinOscillator, zeroLine |
/* EXAMPLES */
// Bullish cross
chart.at01hs.chaikinOscillator.previous.chaikinOscillator <
chart.at01hs.chaikinOscillator.previous.zeroLine &&
chart.at01hs.chaikinOscillator.chaikinOscillator >
chart.at01hs.chaikinOscillator.zeroLine
// Bearish cross
chart.at01hs.chaikinOscillator.previous.chaikinOscillator >
chart.at01hs.chaikinOscillator.previous.zeroLine &&
chart.at01hs.chaikinOscillator.chaikinOscillator <
chart.at01hs.chaikinOscillator.zeroLineOmega One Data Mine — TOC
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5. Arnaud Legoux Moving Average (ALMA)
6. Triple Arnaud Legoux Moving Average (ALMA)
7. EMA Crossing