Stock Predictor trading strategy

Chaikin Change Direction

The Chaikin Oscillator measures the momentum of money flowing into or out of a stock. It is the difference between the 3-day and the 10-day exponential moving averages of the Accumulation/Distribution line. Rising values point to accumulation, falling values to distribution.

Strategy group

Trend and money flow strategies

Based on

Chaikin Oscillator

Typical parameters

3-day and 10-day EMAs

This strategy buys when the Chaikin Oscillator changes direction from downward to upward and sells when it changes direction from upward to downward.

Trading signals

• Buy when the Chaikin Oscillator turns upward.
• Sell when the Chaikin Oscillator turns downward.

Strategy rules

IF CHO[t-2] > CHO[t-1] < CHO[t]
   THEN GO LONG
IF CHO[t-2] < CHO[t-1] > CHO[t]
   THEN GO SHORT

Where CHO = EMA3(A/D) − EMA10(A/D) is the Chaikin Oscillator; [t] is today, [t-1] yesterday, [t-2] two days ago.

See also: how the Accumulation/Distribution indicator is calculated.