Volume indicators
Accumulation/Distribution (A/D)
A running total of volume that leans towards buying when candles close near their highs and towards selling when they close near their lows.
The idea in plain words
Where the price closes within its range tells you who won the candle. A/D adds a portion of the volume for closes near the high and subtracts it for closes near the low, building a line that shows whether money is flowing in (accumulation) or out (distribution).
How it is calculated
Each candle's position of the close in its range (from −1 at the low to +1 at the high) is multiplied by its volume and added to the running total.
Close location = ((close − low) − (high − close)) ÷ (high − low)
A/D = previous A/D + close location × volumeHow to use it
- Rising A/D confirms an uptrend; falling A/D confirms a downtrend.
- Divergence: price rising while A/D falls suggests the rally lacks real buying.
Drawing conclusions
- The level of the line means nothing; only its direction and its divergences matter.
Example
A stock trades flat for two weeks but closes near the top of each day's range: A/D climbs steadily, hinting at quiet buying before a breakout.
Prices in examples are illustrative.
Watch out for
- On currencies, metals and CFDs there is no central exchange volume. The chart uses "tick volume", the number of price changes in each candle, which follows real activity closely but is not the number of contracts traded.
A little history
Developed by Marc Chaikin.
Educational content only. No indicator or pattern predicts the future, and nothing here is investment advice.