EURUSD 1.1698 USDJPY 111.35 USDCAD 1.2478 EURCZK 26.030 USDCZK 22.244 EURPLN 4.2500 USDPLN 3.6322
EURUSD 1.1698 USDJPY 111.35 USDCAD 1.2478 EURCZK 26.030 USDCZK 22.244 EURPLN 4.2500 USDPLN 3.6322

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This indicator shows the level of a trader's interest in a certain asset

Rule of thumb

A typical example of divergences between  prices and the Accumulation/Distribution indicator, is a situation where:

  • the market is rising, reaching a new maximum level in a given period, and
  • at the same time the indicator fails to confirm the move  is below its maximum levels in the same time-frame

The Accumulation/Distribution indicator, developed by Marc Chaikin, is based on the idea that  significant market movements are usually accompanied by higher market turnover.

 

Accumulation, distribution, Chaikin, indicator

 

As follows, the indicator attributes more importance (weight) to  prices that occur during periods of higher volume. At the same time, movements that take place when the turnover is low are considered to be less important. 

 

The interpretation of the Accumulation/Distribution line rise is that the buying side has the initiative on the market, as most of the turnover takes places when the prices reach  new levels. A rise of the indicator line displays  upward price pressure, which is dependent on  increased demand. On the other hand, a decline of the Accumulation/Distribution indicator reflects the situation when a supply side has the initiative on the market and indicates  selling pressure from the market.

 

The Accumulation/Distribution indicator can be used for confirmation of  market movements. When the indicator behaves in the same way as the prices,  market movement is confirmed. Divergences between  price action and the indicator undermine the significance of the market move in question, and hint at possible trend reversal.

 

How to use it with MetaTrader 5:

  • Select a chart for which you want the Distribution/Accumulation indicator to be calculated.
  • Go to: Insert - Indicators - Volumes – Distribution/Accumulation.
  • For the “volumes” parameter in the pop-up box, select “tick” instead of “real”.
  • Accumulation/Distribution will be automatically calculated by MetaTrader 5. 

Pola oznaczone gwiazdką są wymagane.

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