Williams Accumulation/Distribution: Indicator Rules and Backtest Logic

Summary

The document introduces Williams Accumulation/Distribution (AD) as a way to interpret buying or selling pressure and describes a divergence method: a new price high without a corresponding AD high may indicate distribution, while a new price low without a new AD low may indicate accumulation. These divergences are presented as sell and buy clues, respectively.

The included backtest script uses a simpler rule than that explanation. It calculates a running AD value from close-to-prior-close changes relative to the previous bar’s high or low, then holds a long or short bias according to whether that value is positive or negative; an input can reverse the bias. It does not implement the described price-versus-indicator divergence entries. The material reports no test period, performance figures, or evidence of profitability, and labels the script educational. Readers should distinguish the conceptual divergence guidance from the implemented position logic.

Key ideas

• The written guidance interprets price highs or lows that are not confirmed by AD as possible divergences.
• The script derives a running AD series from price changes relative to the previous bar’s range.
• Its entries follow the sign of the AD series rather than the divergence rules in the explanation.
• A setting can reverse the long and short bias.
• No performance results are supplied, and the script is presented for educational use.

Tags

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