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Williams' Accumulation/Distribution (A/D)

Developed by Larry Williams, the Williams' Accumulation/ Distribution indicator is used to define if the marketplace is controlled by sellers (distribution) or by buyers (accumulation) and trading when there is discrepancy between the A/D indicator and price.

Williams Accumulation/Distribution

To calculate the Williams' Accumulation/Distribution indicator, determine:

True Range High (TRH) = Yesterday's close or today's high whichever is greater

True Range Low (TRL) = Yesterday's close or today's low whichever is less

The day's accumulation/distribution is then calculated by comparing today's closing price to yesterday's closing price.

If today's close is greater than yesterday's close: Today's A/D = today's close - TRL

If today's close is less than yesterday's close: Today's A/D = today's close - TRH

If today's close is the same as yesterday's close then the A/D is zero.

The Williams' Accumulation/Distribution indicator is a cumulative total of the daily values:

Williams A/D = Today's A/D + Yesterday's Williams A/D

Williams states it is worth selling if the price makes a new high and the indicator fails to follow suit. Additionally, it is better to purchase if prices fall to a new bottom yet the A/D indicator fails to reach a new low.

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