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In this video we take a look at the Accumulation/Distribution Indicator. Access the indicator for free when you register for a free demo of the Forex platform and charting package.
KEY POINTS REGARDING THE WILLIAMS ACCUMULATION/DISTRIBUTION INDICATOR
1. One of the many indicators created by commodity trader and author Larry Williams (father of actress Michelle Williams)
2. Generates a reading of whether the marketplace is controlled by sellers (distribution) or by buyers (accumulation)
3. Trading signals are based on discrepancies between the indicator and the security’s actual price
CALCULATING THE WILLIAMS ACCUMULATION/DISTRIBUTION INDICATOR
True Range High (TRH) = Whichever is higher, yesterday's close or today's high
True Range Low (TRL) = Whichever is lower, yesterday's close or today's low
The daily value of accumulation/distribution is determined by comparing today's and yesterday's closing prices.
If today's close is higher than yesterday's close: A/D = today's close – TRL
If today's close is lower than yesterday's close: A/D = today's close – TRH
If today's close is the same as yesterday's close: A/D = zero
The Williams' A/D is a cumulative total of these daily values:
Williams' A/D = Today's A/D + Yesterday's Williams' A/D
READING THE WILLIAMS ACCUMULATION/DISTRIBUTION INDICATOR
Williams' indicator generates signals based on divergences between the indicator and price
Sell: distribution, or a seller's market, is signaled when the security reaches a new high and the indicator fails to reach a new high
Buy: accumulation, or a buyer's market, is signaled when the security reaches a new low and the indicator fails to reach a new low
EXAMPLES OF WILLIAMS ACCUMULATION/DISTRIBUTION INDICATOR
In the chart below, note the red arrows; at those points, price has reached a new high while the Williams Accumulation/Distribution indicator has not -- thus providing a sell signal.
http://www.informedtrades.com/images...ution-sell.png
In the chart below, the red arrow indicates a point where price has reached a low but the Williams Accumulation/Distribution indicator has not -- thus yielding a buy signal.
http://www.informedtrades.com/images...bution-buy.png
In this video we take a look at the Accumulation/Distribution Indicator. Access the indicator for free when you register for a free demo of the Forex platform and charting package.
Inserted Video
KEY POINTS REGARDING THE WILLIAMS ACCUMULATION/DISTRIBUTION INDICATOR
1. One of the many indicators created by commodity trader and author Larry Williams (father of actress Michelle Williams)
2. Generates a reading of whether the marketplace is controlled by sellers (distribution) or by buyers (accumulation)
3. Trading signals are based on discrepancies between the indicator and the security’s actual price
CALCULATING THE WILLIAMS ACCUMULATION/DISTRIBUTION INDICATOR
True Range High (TRH) = Whichever is higher, yesterday's close or today's high
True Range Low (TRL) = Whichever is lower, yesterday's close or today's low
The daily value of accumulation/distribution is determined by comparing today's and yesterday's closing prices.
If today's close is higher than yesterday's close: A/D = today's close – TRL
If today's close is lower than yesterday's close: A/D = today's close – TRH
If today's close is the same as yesterday's close: A/D = zero
The Williams' A/D is a cumulative total of these daily values:
Williams' A/D = Today's A/D + Yesterday's Williams' A/D
READING THE WILLIAMS ACCUMULATION/DISTRIBUTION INDICATOR
Williams' indicator generates signals based on divergences between the indicator and price
Sell: distribution, or a seller's market, is signaled when the security reaches a new high and the indicator fails to reach a new high
Buy: accumulation, or a buyer's market, is signaled when the security reaches a new low and the indicator fails to reach a new low
EXAMPLES OF WILLIAMS ACCUMULATION/DISTRIBUTION INDICATOR
In the chart below, note the red arrows; at those points, price has reached a new high while the Williams Accumulation/Distribution indicator has not -- thus providing a sell signal.
http://www.informedtrades.com/images...ution-sell.png
In the chart below, the red arrow indicates a point where price has reached a low but the Williams Accumulation/Distribution indicator has not -- thus yielding a buy signal.
http://www.informedtrades.com/images...bution-buy.png