Accumulation/Distribution Technical Indicator

Accumulation/Distribution Technical Indicator, EURUSD, H1

Accumulation/Distribution Technical Indicator is defined by some price and volume changes. The volume represents a weighting coefficient at the change of price — when we have a higher volume then the contribution of the price change will be in the value of the indicator.

Actually, this indicator is a variety of the more commonly used indicator called On Balance Volume. They have the purpose to confirm price changes by the means of measuring the respective volume of sales.

When the Accumulation/Distribution indicator goes up, it means accumulation or buying of a particular security. Analogically, when the indicator goes down, it means distribution or selling of the security. Most of sales then are realized during the downward price movement.

Deviation between this kind of indicator and the price of the security could point the upcoming change of prices. In such case, the price tendency moves in the same direction as that one of the indicator. In this way, if the indicator goes up, and the price of the security goes down, a price reverse might occur.


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