Description

Accumulation & Distribution is a classic technical analysis tool that shows in which phase the asset is - accumulation or distribution. The difference to the SpreadFighter version is that the user can choose the data source for calculating the indicator. In addition, a moving average of the indicator values has been added for better perception.

Functionality

The indicator has the following parameters to setup:

Market data input - the source of data for the calculation (trading volume, cumulative delta, open interest);
Length - the length of the oscillator;
Moving average typeline - the type of moving average being calculated. Can take values: "SMA" (Simple Moving Average), "EMA" (Exponential Moving Average), "WMA" (Weighted Moving Average), "VWMA" (Volume Weighted Moving Average), "LSMA" (Linear Regression).

User settings

In the graphic settings window, the user can select the colors and transparency of the indicator, the moving average, and the filling of the contour formed by the indicator and the moving average.

Style settings

Access to indicator

The indicator is available on all subscription plans.

Use Cases

The Accumulation/Distribution (A/D) indicator is a variation of the On-Balance Volume (OBV) indicator. It reflects the overall mood of major market participants trading a specific asset over a selected time interval. It is believed that during the Accumulation phase, large players accumulate the asset before the onset of a strong upward trend, and in the Distribution phase, they sell it off.

The A/D indicator chart largely mirrors the price chart, but it can be used to find divergence patterns, indicating a likely imminent trend change, or convergence, confirming the start of a trend.

<aside> 💡 The main divergence pattern is divergence. This is a situation where the asset price extremes are updated, and the A/D extremes are not updated, or change direction..

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DIvergence