What is the difference between A/D and OBV?

OBV adds/subtracts entire volume based on price direction. A/D weights volume based on where price closes within the day's range.

Key Takeaways

Difficulty:Intermediate

Reliability:Moderate

Category:volume

Timeframes:1H, 4H, Daily

Accumulation/Distribution Line

volume📊 1H, 4H, Daily

Cumulative indicator measuring money flow based on where price closes within its range.

Formula

Code

CLV = ((Close - Low) - (High - Close)) / (High - Low)

A/D = Previous A/D + (CLV × Volume)

Detailed Explanation

The Accumulation/Distribution Line measures the cumulative flow of money into and out of an asset.

Key Concept:
If price closes near the high of the range, more volume is attributed to accumulation. Near the low, more to distribution.

Difference from OBV:
OBV uses entire volume on up/down days, A/D uses volume proportional to close location in range.

Trading Setup Example

Entry, stop loss, and take profit levels.

📈 Buy Setup

📉 Sell Setup

Always wait for signal confirmation before entering a trade.

Where This Indicator Works Best

Trend context and market position.

📈 Bullish Context

📉 Bearish Context

Confirms price moves through volume analysis.

Live Chart — Accumulation/Distribution Line

See Accumulation/Distribution Line in action on a live chart. Try changing the settings and timeframe.

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📈 Bullish Signals

A/D rising while price flat (accumulation), bullish divergence

📉 Bearish Signals

A/D falling while price flat (distribution), bearish divergence

Python Implementation

A/D Line calculation

Python

import pandas_ta as ta

df['AD'] = ta.ad(df['high'], df['low'], df['close'], df['volume'])

TradingView Pine Script

Try on TradingView

JavaScript

//@version=5

indicator("A/D Line")

ad = ta.accdist

plot(ad, "A/D", color=color.blue)

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MT5 MQL5 Code

C++

int ad_handle = iAD(_Symbol, _Period, VOLUME_TICK);

double ad[];

CopyBuffer(ad_handle, 0, 0, 100, ad);

Python Libraries

pandas-ta

Technical analysis

pip install pandas-ta

Common Mistakes

✗Ignoring divergences

✗Using without reliable volume

Confirmation Signals

OBV

Price action

Volume

Best For

Money flow analysisDivergence tradingTrend confirmation

💡 Pro Tips

•Focuses on where price closes within the range
•More sophisticated than OBV
•Divergences precede price moves

Last updated: February 8, 2026

Educational Disclaimer

This content is for educational purposes only and does not constitute financial or investment advice. Trading involves significant risk and you may lose your capital. Always consult a licensed financial advisor before making investment decisions.

Learn More

Investopedia - Technical Indicators— Financial Education BabyPips - Technical Indicators— Trading School MetaTrader 5 Docs— Official Documentation

Frequently Asked Questions

Related Indicators

On-Balance Volume (OBV)

Cumulative indicator that adds volume on up days and subtracts on down days. Shows buying/selling pressure.

Money Flow Index (MFI)

Volume-weighted RSI that measures buying and selling pressure using price and volume.

Chaikin Oscillator

MACD applied to Accumulation/Distribution line, measuring momentum of money flow.

Back to All Indicators