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Distribution of the security is indicated when the security is making a new high and the A/D indicator is failing to make a new high. Sell.
Accumulation of the security is indicated when the security is making a new low and the A/D indicator is failing to make a new low. Buy.
Calculation:
To calculate Williams' Accumulation/Distribution indicator, first determine the True Range High ("TRH") and True Range Low ("TRL").
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Barchart then applies a 14-day moving average of the results for smoothing.
Default Parameters: Period: 14
Alligator
"Most of the time the market remains stationary. Only for some 15-30% of time the market generates trends, and traders who are not located in the exchange itself derive most of their profits from the trends. My Grandfather used to repeat: "Even a blind chicken will find its corns, if it is always fed at the same time". We call the trade on the trend "a blind chicken market". It took us years, but we have produced an indicator, that lets us always keep our powder dry until we reach the blind chicken market". -- Bill Williams
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