The accumulation distribution indicator (AD) or accumulation distribution line is a volume-based indicator used to determine the trend of a stock, using the relation​ ...Accumulation/DistributionIndicator(A/D)Anindicatorusedtoanalyzetheextentofaccumulation(demand)anddistribution(supply)ofastockHome›Resources›Knowledge›Trading&Investing›Accumulation/DistributionIndicator(A/D)WhatistheAccumulation/DistributionIndicator(A/D)?Theaccumulationdistributionindicator(AD)oraccumulationdistributionlineisavolume-basedindicatorusedtodeterminethetrendofastock,usingtherelationbetweenthestock’spriceandvolumeflow.Theterm“accumulation”denotesthelevelofbuying(demand),and“distribution”denotesthelevelofselling(supply)ofastock.Hence,basedonthesupplyanddemandpressureofastock,onecanpredictthestock’sfuturepricetrend.  Theabovefigurerepresentstheaccumulation/distribution(A/D)comparisonchartofastockforaperiod.Theorangelineisthestockpricevariationovertheperiod,andthegreylineistheA/Dlineforthesameperiod.Asyoucansee,theA/Dlineisrelativetothestockprice.Whenthestockpricewaslow,theA/Dindicatorwaslow,andwhenthestockpricewashigh,theA/Dindicatorwashigh. Accumulation/DistributionFormulaTheaccumulationdistributionformulacomprisesthreecomponents:  Themoneyflowmultiplierisintherangeof+1and-1.Ifthestock’sclosingpriceisintheupperhalfoftheHigh-Low,thenthemultiplierispositiveandnegativewhentheclosingpriceisinthelowerhalf.Themoneyflowmultipliervaluerepresentsthebuying-sellingpressureofthestock.Themultiplierwillbepositiveifthebuyingpressureisstrongerthanthesellingpressure(moreindemand)andviceversa.Sincetheaccumulationdistributionindicatorisacumulativemeasure,thepreviousA/Dvalueisaddedtothecurrentperiod’smoneyflowvolumetogetthecurrentA/Dvalue.MoneyflowvolumeisthefirstA/Dvalue.Themoneyflowvolume,combinedwiththepreviousA/Dvalue,confirmsthecurrentpricetrendandhelpspredictthesustainabilityofthecurrenttrend. HowtheAccumulation/Distribution(A/D)IndicatorWorks?TheprimaryruleoftheA/DindicatoristhatstockvolumeVolumeofTra