Where the accumulation-distribution-line runs cumulatively forever, Chaikin money flow windows it, typically over 20 or 21 periods, and normalises by volume so readings are comparable over time.
Persistent positive readings are taken as sustained buying pressure and persistent negative readings as selling pressure, with the zero line as the dividing point. Traders watch for it to diverge from price near highs and lows.
It inherits the gap blindness of its parent and adds sensitivity to the window length. It is also easily confused with money-flow-index, which is a different calculation despite the similar name. Both are approximations of participation, not measurements of it.
Related: accumulation-distribution-line, money-flow-index, on-balance-volume, oscillator, volume