Blockchain and Cryptocurrency Advanced - Determining Buy and Sell points Using the CMF Indicator

The CMF indicator has proven to be a very powerful indicator that is great for signaling buy and sell points based on the movements of the CMF line, the value of the CMF and cross overs.

For Buy Entry and Exit

Before making a buy trade when using the CMF indicator, it is important to pay attention to the closing prices in relation to the highs. If the close prices are close to the highs of the session and the volume is increased, it means that the buying pressure have been high due to accumulation in the market. This accumulation in the market and the increased buying pressure causes the upward price movement. The CMF oscillator would reflect this move by having a positive reading above the 0 line.

When making a buy trade, I like to make use of +/- 0.1 crossover as a strategy for the buy. When the price is rising and the CMF oscillator line moves from below the negative 0.1 value and crosses above the positive 0.1 value, it is good signal for buy trade as there is a strong possibility that the price would continue in the upward direction.

For Buy Exit, when the CMF oscillator line already in the positive value moves from above the positive 0.1 value and approaches the negative 0.1 value, it is good exit signal as there is a strong possibility that the price could continue to move in the downward direction.

AAVE/USDT Chart

For Sell

Before making a sell trade when using the CMF indicator, it is important to pay attention to the closing prices in relation to the lows. If the close prices are close to the lows and the volume is decreased, it means that the selling pressure has been high due to distribution in the market. This distribution in the market and the increased selling pressure causes the downward price movement. The CMF oscillator would reflect this move by having a negative reading below the 0 line.

When making a sell trade, I also like to make use of +/- 0.1 crossover as a strategy for the sell trade. When the price is falling and the CMF oscillator line moves from above the positive 0.1 value and crosses below the negative 0.1 value, it is good signal for sell trade as there is a strong possibility that the price would continue in the downward direction.

For Sell Exit, when the CMF oscillator line already in the negative value, moves from below the negative 0.1 value and approaches the positive 0.1 value, it is good exit signal as there is a strong possibility that the price could continue to move in the upward direction.

AAVE/USDT Chart