P
PipsGrowth

Key Takeaways

Difficulty:Intermediate
Reliability:Moderate
Category:volume
Timeframes:1H, 4H, Daily

Accumulation/Distribution Line

volumešŸ“Š 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 Ɨ 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.

šŸ“ˆ Bullish Signals

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

šŸ“‰ 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

āœ—Ignoring divergences
āœ—Using without reliable volume

Confirmation Signals

OBV
Price action
Volume

Best For

Money flow analysisDivergence tradingTrend confirmation

šŸ’” Pro Tips

  • ā€¢Focuses on where price closes within the range
  • ā€¢More sophisticated than OBV
  • ā€¢Divergences precede price moves
Last updated: December 29, 2024

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 IndicatorsBabyPips - Technical IndicatorsMetaTrader 5 Docs

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.

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