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Chaikin Oscillator

Created by Marc Chaikin, this oscillator calculates the momentum of the Accumulation Distribution of a MACD. This meta indicator (an indicator of an indicator) is the difference between the 3-day EMA of the Accumulation Distribution Line and the 10-day EMA of the Accumulation Distribution. A similar but less accurate indicator is the On Balance Volume indicator.

You can use it to confirm trends or potential coming reversals in price movement.

Interpretation

Remember that the Chaikin Oscillator is twice removed from price, because it is an indicator of an indicator. That makes it only useful for measuring momentum that drives buying and selling.

When moving up, this means buying pressure and the bulls are driving the market.
When moving down, this means selling pressure and the bears are prevailing.

If you want a smoother line that doesn't cross the zero line as much, you can change the values of the oscillator to double of what they were. From 3 and 10 to 6 and 20. This makes the line smoother but keeps the ratio.

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