The Chaikin Oscillator indicator for MetaTrader 5 is a technical indicator with metrics for measuring money flow in the financial trading market. This is one of the best indicators that will come in handy for predicting future price direction more accurately.
The indicator’s algorithm compares current and past performance such as market volume, high/low, and closing price to determine if cash flow is positive or negative. Therefore, positive cash flow indicates the possibility of an increase in the value of the instrument (bullish movement), while negative cash flow suggests that the price of the instrument may fall (bearish movement).
This information displayed by the indicator is invaluable for more accurately predicting what the market might do in the future. Essentially, the indicator will help you anticipate the possibility of a reversal or trend continuation in the market.
How to Trade With the Chaikin Oscillator Indicator
The image below shows the action of the Chaikin Oscillator Indicator on the EURUSD pair in the H4 timeframe.
The 0.00 level of the indicator defines positive and negative money flow. Thus, the money flow of a trend is considered positive when the indicator oscillates above the 0.00 zone, which also suggests an optimal zone to look for buying opportunities. Similarly, the indicator depicts a negative money flow when it oscillates below the 0.00 level, which also indicates a suitable zone to look for selling opportunities.
Setting
Fast EMA period: This parameter shows the value of the fast exponential moving average.
Slow EMA period: This shows the value of the slow exponential moving average.
MA method: This shows the method of the moving average.
Volumes: This depics the volume you want to use in the indicator Real or Tick volumes.
Conclusion
The Chaikin Oscillator Indicator for MT5 is a forex trading tool that tells when a financial instrument is gaining or losing strength. The indicator is suitable as a confluence to identify buying or selling opportunities in the market.
