Chaikin Oscillator
Technical IndicatorsA volume-based momentum indicator that measures the difference between the 3-day and 10-day exponential moving averages of the Accumulation/Distribution line. It helps identify whether buying or selling pressure is building.
What Is the Chaikin Oscillator?
The Chaikin Oscillator, created by Marc Chaikin, applies MACD (Moving Average Convergence Divergence)-style analysis to the Accumulation/Distribution line. It calculates the difference between a 3-period EMA and a 10-period EMA of the A/D line. When the oscillator is positive, short-term accumulation (buying pressure) exceeds the longer-term trend. When negative, distribution (selling pressure) dominates.
Chaikin Oscillator Signals
A zero-line crossover is the primary signal. When the oscillator crosses above zero, buying pressure is accelerating. Below zero, selling pressure takes over. Divergence between the Chaikin Oscillator and price provides reversal warnings: if price makes a new high but the oscillator fails to, buying pressure is weakening despite the price advance. This divergence works on 4-hour and daily charts for EUR/USD and GBP/USD.
Practical Application
In forex, tick volume replaces traditional volume, but the Chaikin Oscillator still provides useful signals. Use it as a confirmation tool: before entering a breakout long, check that the Chaikin Oscillator is positive and rising. Before entering a short, confirm it is negative and falling. Combine it with On-Balance Volume for a more complete volume picture, or use it alongside RSI (Relative Strength Index) to add volume context to momentum readings.
Related Terms
Accumulation/Distribution
A cumulative volume-based indicator that uses the relationship between a pair's closing price and its high-low range to determine whether money is flowing into (accumulation) or out of (distribution) a currency pair.
On-Balance Volume
A cumulative volume-based indicator that adds volume on up days and subtracts volume on down days. Rising OBV confirms uptrends, while falling OBV confirms downtrends. Divergence between OBV and price can signal upcoming reversals.
Money Flow Index
A volume-weighted RSI that combines price and volume data to measure buying and selling pressure. It oscillates between 0 and 100, with readings above 80 indicating overbought and below 20 indicating oversold conditions.