Volume Indicator: Accumulation/Distribution

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Volume Indicator: Accumulation/Distribution

Postby Nikolay.Gekht » Sat Aug 28, 2010 8:13 pm

Accumulation Distribution confirms price trends or notifies of weak movements that could result in a price reversal using volume.

* Accumulation: Volume is considered to be accumulated when the day's close is higher than the previous day's closing price. Thus the term "accumulation day"

* Distribution: Volume is distributed when the day's close is lower than the previous day's closing price. Many traders use the term "distribution day"

The basic A/D formula is
A/D = ((close - low) - (high - close)) / (high - low) * volume

Btw, some analysis methods use the accumulated version of the indicator:
A/D = (((close - low) - (high - close)) / (high - low) * volume) + A/Dprevious

This implementation supports both modes. The mode can be chosen via the indicator parameters.

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See also the version of the indicator with Tradestation's formula

The indicator was revised and updated
Nikolay.Gekht
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