Chande Forecast Oscillator (CFO) Indicator Explained

The Chande Forecast Oscillator (CFO) fits a linear regression to recent price, projects where price should be, and reports the percentage gap between reality and forecast. Positive CFO: price is running ahead of its own trendline; negative: it's lagging behind.

How It Works

• Percent difference between close and the linear-regression forecast value.
• Zero = price exactly on its statistical trendline.
• Persistent positive readings = price consistently beating its trend.

How to Trade It

Use zero-crosses as trend-relative momentum shifts, or fade large gaps back toward the forecast in mean-reverting conditions. CFO also makes an elegant pullback qualifier: in an uptrend, a dip to slightly negative CFO marks price cheap relative to its own trend.

Building It in Setup.Cash

Add Chande Forecast Oscillator (CFO) in the strategy builder — the length input controls its sensitivity — and use its value in any entry, exit, or filter condition. You can also combine it with other tools in the Indicators Lab or via the AI indicator generator. Built on the same math as the Linear Regression indicator. For the full category overview, see the advanced momentum library guide.

Momentum signals are timing tools — combine them with a trend or regime filter and backtest the exact rules before going live.