The Dow has 30 while the S&P 500 has 500 companies. When applied on a chart, the Advance Line Indicator appears as a line that is similar to the accumulation ...HowtoTradeIndexeswiththeAdvanceDeclineLine(ADL)×CloseWehopeyouenjoyreadingthispost.Doyouwanttotakeyourtradingtothenextlevel?DayTradeTheWorld™»TradingBlog»HowtoTradeIndexeswiththeAdvanceDeclineLine(ADL)Inthepastfewmonths,wehavebeenonajourneytohelpourtradersmakegooddecisionsinthemarket.WehavedonethatbyshowinghowourtraderstradeinFacebookandonYouTube(witha3hoursdailyshow).Wehavealsobeenwritingmoreabouttechnicalindicatorsandhowyoucanusetheminthemarket.Inthisreport,wewilllookattheAdvanceDeclineLine(ADL),whichisnotaverypopularindicatorinthemarket.PageContentsWhatistheAdvanceDeclineLineIndicator?BestPracticeHowisitCalculated?HowdoyouUsetheAdvanceDeclineLineIndicator?APracticalExampleFinalThoughtsWhatistheAdvanceDeclineLineIndicator?TheAdvanceDeclineIndicator,alsoknownastheADLine(orADL)isanindicatorusedinthestockmarket.Theindicatorisbasedontheideaofnetadvances,whichisaconceptoflookingatthenumberofstocksthatarepositiveforthedayminusthosethatarenegativeintheday.Asaresult,theADlinewillbepositivewhenthestocksthataregainingarepositive.Thelineisnegativewhenmoststocksbeinganalysedarenegative.BestPracticeBecauseofhowitisstructured,theADLindicatorismostlyusefulwhenyouaretradingthemainindexesliketheDowJonesIndustrialAverage,S&P500,andtheDAX.Thisissimplybecausetheseindexesaremadeupofanexactnumberofstocks.TheDowhas30whiletheS&P500has500companies.Whenappliedonachart,theAdvanceLineIndicatorappearsasalinethatissimilartotheaccumulationanddistributionlinethatwecoveredawhileback.HowisitCalculated?TheADlineiscalculatedbylookingatthestocksthataregainingtodayandsubtractingthepreviousday’sAD.Thisformulaisshownbelow:ADL=(Today’sgainingstocks–Today’slaggingstocks)+yesterday’sADlinevalueYoucanalsofactorinthevolumeofthesestocksbyusingtheformulabelow:ADL=(Today’sadvancevolume–Today’sdecliningvolume)+yesterday’sADLvolumeTherefore,theprocessofca