An indicator that weighs, by volume, whether closes over the last 20 candles mostly ended near the top or the bottom of each day, shown between −1 and +1.
- Weapon tier
- Standard
- Slots used
- Sub-charts 1/2
- Created by
- Marc Chaikin
Concept
One line is drawn in a lower panel. It uses the same ingredient as the AD Line — positive the closer the close ends to the day’s high, negative the closer to the low — but instead of adding it up forever, it divides the sum over the last 20 candles by the volume over the same candles.
Above 0, recent trading leaned toward closes “ending near the top” (buying pressure); below 0, toward closes “ending near the bottom” (selling pressure).
- CMF
Charts by TradingView Lightweight Charts™
80 candles with volume, and the CMF line in a lower panel. For most of the early part the price slowly falls and CMF stays below 0. At candle 60 (↑) a large up candle on heavy volume appears and CMF jumps above 0 in one go. Afterwards the price moves up and down but holds higher. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.
This chart was picked because the price held up after CMF moved above 0. A single heavy-volume day can prop CMF up for 20 candles, so it does not always turn out like this. Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.
How it is calculated
For each candle, take the location value = ((close − low) − (high − close)) ÷ (high − low). A close at the high gives +1, at the low −1. If the high equals the low, it is 0.
Multiply that value by volume and add it up over the last 20 candles.
CMF = that sum ÷ the volume summed over the same 20 candles. That is why it always stays between −1 and +1.
Parameters
| What it sets | Name in the game | Default | Range |
|---|---|---|---|
| Candles to add up | period | 20 | 2 – 100 |
Trading ideas
Crossing 0: when CMF has been below 0 for a long time and moves above it, it is commonly read as “buying pressure has overtaken selling pressure”. The chart on this page shows that scene.
Confirming a rise: if CMF stays above 0 as the price rises, trading is seen as backing the rise; if the price rises while CMF drops below 0, traders become suspicious.
Common traps
- It ignores the gap from the previous close. A day that opens much lower and closes at its high lifts CMF even though the price fell.
- A single day with a burst of volume carries the value for 20 candles, and the line can suddenly bend on the day it drops out of the window.
- None of these are sure signals. Read them together with the trend (lesson 2).
In the game
- “CMF” is a “Standard” weapon and uses 1 of the “Sub-charts” panels (limit 2). Volume in the starting setup already uses 1, so adding it brings it to 2 (0 left).
- When the line goes below 0 somewhere on screen, a dotted zero line is drawn in the panel.
Related indicators and lessons
- Volume Profile — An indicator that shows with horizontal bars which price levels saw the most trading, to find “the prices where many people bought and sold”.
- OBV — An indicator that keeps a running total, adding the volume of up days and subtracting the volume of down days, to show whether trading leaned toward buyers or sellers.
- MFI — An indicator that multiplies price moves by volume to show, from 0 to 100, whether more money has recently flowed in on the buying side or the selling side.
- Volume Oscillator — An indicator that shows how many % the short-term average volume is above (or below) the long-term average, telling you whether trading is heating up or cooling down.
- Volume Ratio — An indicator that shows the volume of recent up days as a % of the volume of down days, telling you whether trading leaned toward buyers or sellers.
- AD Line — An indicator that keeps a running total of each candle’s volume, weighted by where the close ended between the day’s high and low, to show buying pressure (accumulation) and selling pressure (distribution).
- EOM — An indicator of “how easily the price moves”, showing whether the price rises (or falls) easily even on light volume.
- PVT — An indicator that keeps a running total of “% move × volume” for each candle, showing whether volume pushed more on the rising side or the falling side.
- VWAP — An average-price line that gives more weight to prices from high-volume candles, showing roughly what people paid on average recently.
- Force Index — An indicator that multiplies how far the price moved by volume, showing whether the “force” was behind the rising side or the falling side.
- 1. Reading a single candle
- 4. Volume and volume MA