Indicator - Accumulation Distribution
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Definition Accumulation Distribution
This indicator looks at whether investors are generally buying or selling a financial instrument using volumes and close/high/low prices. When price increased, the accumulation is the distance between the close and the low. When price decreases, the distribution is the distance between the close and the high. The indicator value is the sum of all periods.
Calculation Accumulation Distribution
Accumulation = Close - low
Distribution = High - close
Sum[volume*(Accumulation - Distribution)/(High-Low)]
Interpretation Accumulation Distribution
An increase of the indicator indicates prices close to the high (accumulation), a decrease indicates prices close to the low (distribution). High volumes will amplify the indicator.
The indicator can be used to confirm a trend by moving in its direction. A divergence between price and accumulation/distribution is often a signal that the trend may reverse.
