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Accumulation Distribution Indicator

Description:

Accumulation Distribution is a price indicator that attempts to identify the beginning of a Bull or Bear market move. Accumulation represents the acquisition of long positions and Distribution represents the acquisition of short positions.

Conventional Analysis:

Divergence between price and indicator.

Divergence during market action, not at such extremes, may be open to different
interpretation. Some traders may apply the opposite logic.

Additional Analysis:

A buy signal is given when the market item reaches a new 45 bar high and Accumulation Distribution has not reached a new 45 bar high. A sell signal is given when the market item has made a new 45 bar low and Accumulation Distribution has not made a new 45 bar low. Some traders looking for a shorter term indicator may want to plot Accumulation Distribution against an average of itself and use the crossovers to signal trades.

Additional References:

Williams, Larry. Secret of Selecting Stocks. Windsor Books. New York. 1986
Technical Analysis Studies Available
 

You can adjust parameters of each indicator to suit you.

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