What is accumulation distribution?

Accumulation Distribution uses volume to confirm price trends or warn of weak movements that could result in a price reversal. 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”

When to use accumulation/distribution indicator?

Apply accumulation/distribution indicator when you want to confirm the trend direction. When you see that the price and the indicator form higher lows and higher highs then it means an upward trend. The negative or downward trend can be expected when the price and the accumulation/distribution indicator form lower lows and lower highs.

What is a cumulative distribution line?

The Accumulation Distribution Line is a volume-based indicator developed by Marc Chaikin to measure the cumulative flow of money into and out of a security. Chaikin originally called the indicator the Cumulative Money Flow Line. As with cumulative indicators, the Accumulation Distribution Line is a running total of each period's Money Flow Volume.

Is accumulation distribution a sign of a down trend?

When both price and Accumulation Distribution are making lower peaks and lower troughs, the down trend is likely to continue. If during a trading range, the Accumulation Distribution is rising, then accumulation may be taking place and is a warning of an upward break out.