Accumulation / Distribution

All functions · nseries package

AccumDist

func (s Series) AccumDist(h, l, c, v Series) Series

AccumDist implements Chaikin’s Accumulation/Distribution (A/D) line. Developed by Marc Chaikin in the 1970s, it measures the flow of money into and out of a security. This volume-based indicator helps to identify the underlying buying or selling pressure that may not be immediately apparent from price action alone.

The A/D line examines where the closing price falls within a trading range. When prices close in the upper portion of the range, this indicates buying pressure. When prices close in the lower portion of the range, this indicates selling pressure. When prices close around the midpoint, this indicates neutral pressure.

The indicator becomes more significant when accompanied by high volume. A strong close near the high with high volume results in a substantial A/D line increase, while low volume or mid-range closes produce smaller movements.

A rising A/D line confirms an uptrend and a falling A/D line confirms a downtrend.

When the A/D line moves in the opposite direction of price, it can signal potential reversals. A bullish divergence occurs when prices makes a new low and the A/D line shows strength (potential capitulation). A bearish divergence occurs when price make a new high but the A/D line fails to follow (potential exhaustion). - Bearish divergence: Price makes new highs while A/D line fails to follow - Bullish divergence: Price makes new lows while A/D line shows strength

Note that this is a lagging indicator, and it may generate false signals during periods of consolidation.

Note that this differs from the TradeStation implementation, which uses (C-O)/(H-L) * V.

The cumulative line starts at 0 on bar 0, so bar 0’s own money flow is not added.