Accumulation/Distribution: Calculating the Line and Building Simple Strategies

Summary

The document explains the Accumulation/Distribution line as a cumulative measure of money flow derived from each period’s close within its high-low range and the period’s volume. It lays out the money flow multiplier, money flow volume, and running-total calculation, and walks through a sample price-and-volume series. The indicator is presented as a way to assess whether volume confirms a price trend or diverges from it.

Four rule sets are described: whether the line is rising or falling, whether it exceeds the range of its recent values, and simple bullish or bearish comparisons between changes in the line and new price highs or lows. The article then outlines coding these rules as MQL5 trading systems. It frames the rules as educational starting points that may need optimization and testing. The examples use simple comparisons, including a short lookback and consecutive observations, and provide no strategy performance results or evidence of robustness.

Key ideas

• The AD line adds each period’s volume-weighted close position within its high-low range to a cumulative total.
• A rising or falling AD value is used as a basic directional signal.
• Comparing the current AD value with recent extremes is presented as a simple strength check.
• Price making a new high or low while AD moves the other way can indicate divergence.
• The example rules are educational and require testing; the article reports no performance evidence.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.