Chaikin Money Flow (CMF) - Built-in Indicator Guide

Computes Chaikin Money Flow (CMF) as the ratio of sum of Money Flow Volume to total volume over a given period.

Overview

Chaikin Money Flow (CMF) measures the amount of buying or selling pressure over a fixed lookback period by combining price action and volume. It is commonly used to confirm trends, spot divergences, or identify overbought/oversold conditions. The indicator draws a line that oscillates around a zero level.

On the chart, a green line represents the CMF value. Values above zero indicate net accumulation (buying pressure), while values below zero indicate net distribution (selling pressure). Crossings of the zero line can signal a shift in the balance of power between buyers and sellers.

How it works

1. For each bar, compute the Money Flow Volume (MFV) using the proprietary Mfv algorithm.
2. Create a rolling sum of the MFV series over length bars using Sum.new(Mfv.new(), length). The current value is obtained with [0].
3. Create a rolling sum of the raw volume series over the same length bars using Sum.new(self.volume, length).
4. Divide the sum of MFVs by the sum of volumes using the divide function, which safely handles zero denominators and returns NaN when volume sum is zero.
5. The result is returned as a single numeric value plotted as a line, updated on each bar.

Mathematical model

Logic flow

flowchart TD
  A["For each bar"] --> B["Get high, low, close, volume"]
  B --> C["Compute MFV using Mfv.new"]
  C --> D["Update rolling sum of MFV with Sum.new"]
  B --> E["Update rolling sum of volume with Sum.new"]
  D --> F["Retrieve current MFV sum [0]"]
  E --> G["Retrieve current volume sum [0]"]
  F --> H["Divide MFV sum by volume sum using divide()"]
  G --> H
  H --> I["Return CMF value to plot"]

Parameters

Code walkthrough

Indicator declaration and parameters

Lines 7-11 of Chaikin Money Flow.indie5:

@indicator('CMF', format=format.PRICE)  # Chaikin Money Flow
@param.int('length', default=20, min=1, title='Length')
@level(0, line_color=color.GRAY, title='Zero')
@plot.line(color=color.GREEN, title='MF')
def Main(self, length):

The indicator is named ‘CMF’ with a PRICE format (uses price data). A user-configurable integer parameter ‘length’ defaults to 20 with a minimum of 1. A zero line is drawn in gray and the CMF line is plotted in green.

Money Flow Volume sum

Lines 12-12 of Chaikin Money Flow.indie5:

    mfv_sum = Sum.new(Mfv.new(), length)[0]

Creates a rolling sum of the Money Flow Volume (MFV) series over the specified length. The series of MFV is generated by Mfv.new(), which computes the per-bar MFV internally. Sum.new(...) returns a sliding sum series; [0] accesses the sum for the current bar.

Volume sum and division

Lines 13-14 of Chaikin Money Flow.indie5:

    vol_sum = Sum.new(self.volume, length)[0]
    return divide(mfv_sum, vol_sum)

Similarly, a rolling sum of the raw volume series (self.volume) is computed over the same length. The CMF value is the safety‑divided sum of MFVs by sum of volumes using the divide function, which safely handles zero denominators. This single value is returned and plotted.

Reading the chart

• Green line: The CMF value, oscillating around zero.
• Zero line (gray): Reference level. Values > 0 indicate net accumulation (buying pressure), values < 0 indicate net distribution (selling pressure).
• Crossovers: A move from below to above zero can signal the start of accumulation; a move from above to below zero can signal distribution.
• Divergence: If price makes a new high but CMF fails to exceed its previous high, selling pressure may be increasing (bearish divergence). The opposite applies for bullish divergence.

Implementation notes

• The Mfv algorithm used internally may have specific handling for equal high/low (flat bar). The standard CMF formula would produce NaN for such bars, but platform behavior depends on the Mfv implementation.
• The divide function ensures that when volume sum is zero (e.g., no trades during the lookback), the output is handled safely.
• The Sum objects maintain state across bars; no manual loop or accumulation is needed.
• The indicator uses only the current bar’s data and does not repaint because sums are based on closed bars.

FAQ

What is Chaikin Money Flow measuring?

CMF measures the amount of volume flowing into or out of a security over a set period by combining price action (close relative to high/low range) with volume. It helps assess the strength of buying or selling pressure.

How do I interpret a zero line crossing?

When CMF crosses above zero, it suggests net accumulation (buyers are in control). A cross below zero suggests net distribution (sellers are in control). These signals are often used as trend confirmation.

Can I change the lookback period?

Yes, the ‘length’ parameter can be adjusted in the indicator settings. A shorter period makes CMF more sensitive to price changes, while a longer period smooths out noise. The default is 20 bars.

Full source code

Indie Script v5, the built-in indicator as shipped with TakeProfit. Add it from the indicators menu or copy the code into the platform’s script editor.

# indie:lang_version = 5
from indie import indicator, format, param, level, color, plot
from indie.algorithms import Sum, Mfv
from indie.math import divide


@indicator('CMF', format=format.PRICE)  # Chaikin Money Flow
@param.int('length', default=20, min=1, title='Length')
@level(0, line_color=color.GRAY, title='Zero')
@plot.line(color=color.GREEN, title='MF')
def Main(self, length):
    mfv_sum = Sum.new(Mfv.new(), length)[0]
    vol_sum = Sum.new(self.volume, length)[0]
    return divide(mfv_sum, vol_sum)