What is accumulation distribution indicator (AD)?

The accumulation distribution indicator (AD) or accumulation distribution line is a volume-based indicator used to determine the trend of a stock, using the relation between the stock’s price and volume flow. The term “accumulation” denotes the level of buying (demand), and “distribution” denotes the level of selling (supply) of a stock.

What is accumulation distribution line?

The accumulation distribution line shows whether there is a buy pressure (accumulation) or a seller side pressure (distribution). Accordingly, you can predict price movements based on the supply and demand for the asset.

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.

What is a/D indicator & how does it work?

The A/D indicator is cumulative, meaning one period’s value is added or subtracted from the last. In general, a rising A/D line helps confirm a rising price trend, while a falling A/D line helps confirm a price downtrend.