Guide · Volume & money flow
Does Chaikin Money Flow work?
Across 375 stocks, Chaikin Money Flow cut the worst fall on 79%, beat buying and holding on risk-adjusted return on 14% and on raw return on 15%. Mainly a seatbelt: it softened the big falls on most stocks, but usually gave up return to do it.
What it predicts
Weighs each day's volume by where the close lands in the day's range. Positive means buying pressure.
- In when the 21-day CMF rises above +0.05.
- Out when it falls below −0.05. In between, the rule keeps its last call.
Volume & money flow plays bet that volume shows conviction. The family guide
How to use it
- It trades often (about 9 switches a year per stock), so costs, spreads and taxes eat into it more than the backtest's 0.05% per switch suggests.
- Expect to be wrong more often than right: only 39% of its calls worked. Its results come from the size of the winners, so following it means sitting through strings of small losses.
- It worked best on Industrials & rentals (33% beat holding on risk-adjusted return) and worst on Media & telecom (0%).
- Use it as one input. Your signal combines the plays you count with the other factors you weight into one call.
When it worked
Chaikin Money Flow did best against holding in the 2008 crash (+13% median gap) and worst in the 2020–21 rally (−26%). Median gap in return against holding the same stock (per year over stretches longer than 18 months; crypto excluded).
| 2008 crash | Recovery 2009–19 | COVID drop | 2020–21 rally | 2022 bear | Since Oct 2022 | |
|---|---|---|---|---|---|---|
| Chaikin Money Flow | +13% | −9% | +6% | −26% | +7% | −10% |
Where it worked
By kind of stock: how often it beat holding on risk-adjusted return, and the median Sharpe ratio gap.
| Group | Beat holding, risk-adjusted | Sharpe gap |
|---|---|---|
| Industrials & rentals | 33% | -0.14 |
| Micro caps | 33% | -0.11 |
| Software & devices | 21% | -0.24 |
| Metals & mining | 18% | -0.27 |
| Healthcare | 17% | -0.25 |
| Energy & power | 14% | -0.19 |
| Industrials & materials | 12% | -0.22 |
| Financials | 12% | -0.17 |
| Real estate | 11% | -0.17 |
| Consumer & retail | 9% | -0.27 |
| Semiconductors | 9% | -0.29 |
| Sectors | 0% | -0.34 |
| Indexes & ETFs | 0% | -0.18 |
| Big tech | 0% | -0.20 |
| Media & telecom | 0% | -0.18 |
Where it helped most
Sharpe ratio gap against holding, stocks with 3+ years of history
Right now
Chaikin Money Flow holds 191 of 377 names as of the Oct 13, 2026 close.
Changed its call in the last two weeks:
Backtest results since 2005 (or as long as each stock has traded), against holding the same stock over the same dates, after 0.05% per switch. Past results don't promise future ones. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.