Generate Accurate Intraday Trading Call by Chaikin Oscillators

Posted on October 4, 2017

Believing in the calls generated by our technical analysts, Money Classic research is one of the best financial advisory firms that lead the way in offering accurate intraday trading tips. We ensure to offer 95 % accurate calls on intraday trading tips with the implementation of technical indicators. We rely on technical indicators and technical oscillators, while trading in stocks or commodities as it is the need of hour. Our technical analysts ensure to use various indicators for different types of markets and situations. Once you understand the ideology of implementing technical indicator, then you can get the accurate and best signals to buy or sell the underlying assets. On the basis of different studies of the stocks, there are several indicators defined to generate accurate intraday cash tips. This is the most common technical oscillators used by the technical analysts is Chaikin Oscillator.

The technical analysts frequently use the technical oscillator that is named after the inventor, Marc Chaikin. Generally, this technical oscillator is used to measure the accumulation distribution line of the Moving Average Convergence/ Divergence. Objective of the technical oscillator is to outline the momentum disguised by the accumulation distribution line. You can calculate the Chaikin oscillator by subtracting a 10 day EMA from 3-day EMA of the accumulation distribution line. Key purpose of the chaikin oscillator is to determine the moving momentum levels within MACD indicator. When the oscillator is capable of recognizing the momentum then technical traders find that the momentum is initial step in the development of a trend, which can be capitalized.

The accumulation distribution line grows with positive Money Flow Multiplier while it falls down with negative Money Flow Multiplier. When there is close in the upper a half then the Money Flow Multiplier becomes positive and the multiplier becomes negative when there is close in the lower half of the period’s high-low range.

The chaikin oscillator becomes positive when the 3-day EMA are faster and moves above the 10-day EMA, which are slower. The chaikin oscillator becomes negative when the 3-day EMA goes below the 10-day EMA.

Thus, to minimize the risk and understand the market well the technical analysts implement Chaikin Oscillator. Signals generated by this oscillator are more regular and frequently easier to measure. The chaikin oscillator must never be used as separate indicator. The Chaikin Oscillator is used in combination with pure price oscillators as well.

The concept of this oscillator is based on three main theses.

  • If a share or an index is higher when it closes than it was during the day, it means that it was a day of accumulation. The more the index gets to the maximum, the more active the accumulation is. The more the index, the minimum the share gets, the more active is the distribution.
  • Stable price growth is accompanied by increase in trade volume and strong accumulation of the volume. As the volume is like fuel that feeds market growth, the lag of volume along with the growth of prices shows that there isn’t enough fuel to continue the rise.
  • You can trace back the volume of money resources coming in to the market and leaving it, with a Chaikin’s oscillator. Comparing the dynamics of volume and prices allows finding out peaks and foundations of the market, both short- and medium-term.

Since there are no correct methods of technical analysis, thus it is recommended using Chaikin oscillator along with other technical indicators. The reliability of short-term and medium-term trade signals will be higher if you use a Chaikin’s oscillator together with, for example, Envelopes based on a 21-day moving average and some oscillator of outbidding/resale.

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