Chaikin Oscillator
factor.formula
Median Indicator (MID):
Chaikin Oscillator (CHO):
Default parameters:
Formula explanation:
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The mid-price (Money Flow Volume) is a volume-weighted price change. It accumulates the daily trading volume multiplied by the price fluctuation of the day, indicating the inflow and outflow of funds.
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Volume, which represents the total number of shares or contracts traded during a specific time period.
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Closing price refers to the price of an asset at the end of a specific time period.
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Highest price refers to the highest trading price of an asset within a specific period of time.
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The lowest price refers to the lowest trading price of an asset within a specific period of time.
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The Exponential Moving Average is a weighted moving average of time series data. Compared with the simple moving average, it is more sensitive to recent price changes. EMA(MID,N) represents the exponential moving average of MID in N time windows.
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The longer period EMA parameter is used to calculate the slower EMA, and the default value is 10. A longer period makes the EMA react more slowly to price changes, thereby smoothing fluctuations and capturing medium- and long-term trends.
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The EMA parameter with a shorter period is used to calculate a faster EMA, and the default value is 3. A shorter period makes the EMA react faster to price changes, thereby more sensitively capturing short-term price fluctuations.
factor.explanation
The Chaikin Oscillator (CHO) evaluates changes in market buying and selling pressure by calculating the difference between the fast and slow exponential moving averages (EMA) of the middle price (MID). The MID measures volume-weighted price fluctuations, while the EMA smoothes the changes in the MID. When the CHO curve rises or falls rapidly, it may mean a potential reversal in market sentiment. Specifically, a CHO crossing above the zero axis is usually interpreted as a buy signal, while a crossing below the zero axis is usually interpreted as a sell signal. At the same time, when the stock price is above a longer-term moving average (such as the 90-day moving average), it is considered a bullish signal when the CHO changes from a negative value to a positive value; when the stock price is below a longer-term moving average, it is considered a bearish signal when the CHO changes from a positive value to a negative value. It should be noted that the CHO may also generate divergence signals, that is, when the price and the indicator trend are inconsistent, it may indicate a change in the price trend. Please note that this indicator is not a panacea and should be used in combination with other technical indicators, fundamental analysis, and market environment.