AccumulateDistribute.AccumulationDistribution Method

The accumulation/distribution indicator illustrates the degree to which an asset is being accumulated or reduced by the market on a given period.

public double AccumulationDistribution(
   double high,
   double low,
   double volume
);

Parameters

high: The intra-period high for the given period under consideration.
low: The intra-period low for the given period under consideration.
volume: The days volume for the given period under consideration.

Return Value

A double equal to the value of the accumulation/distribution indicator for a single period for this asset considered.

Remarks

The indicator uses the closing price's proximity to the high or low to determine if accumulation or reduction is taking place in the market. The proximity measure is also multiplied by the volume in order to give more weight to moves with correspondingly higher volume.

Application

A divergence between the price action and this indicator can signal that a trend is nearing completion, a trends continuation and imminent break-outs from trading ranges. The actual value of this indicator is of no significance, what is significant is its change in value relative to the previous periods which can warn of a possible break-out during a trading range (falling/rising indicator), the continuation of a trend (higher highs in uptrend, or lower lows in downtrend) or a change/completion of a trend (divergence between the price action and the direction of the indicator).

Exceptions