Updated on March 19, 2023
The Chaikin Oscillator is a technical analysis indicator that is used to measure the momentum and the current trend of the price of a security. It is based on the work of Marc Chaikin and is a derivative of the Accumulation/Distribution Line (ADL). This indicator is calculated by subtracting the 10-day Exponential Moving Average (EMA) of the difference between the security’s accumulation/distribution line and its close price from a 3-day EMA of the same calculation.
How to use the Chaikin Oscillator?
Traders can use the Chaikin Oscillator as a momentum indicator. This indicator is used to help identify potential buy and sell signals. A positive Chaikin Oscillator reading suggests a bullish momentum as well as a potential buy signal. On the other hand, a negative Chaikin Oscillator reading suggests a bearish momentum as well as a potential sell signal.