Accumulation/Distribution Line
Running total of volume adjusted for where the close falls within each bar's range; divergence with price highlights accumulation or distribution.
Formula
CLV = ((Close − Low) − (High − Close)) / (High − Low);
ADL_t = ADL_{t-1} + CLV × VolumeThe A/D Line multiplies each bar's volume by the Close Location Value — a ratio from −1 (close at the low) to +1 (close at the high) — and adds the result to a running cumulative total. It is the precursor to Chaikin Money Flow.
When the A/D Line trends upward alongside rising price, the uptrend is confirmed by volume. When price makes a new high but the A/D Line does not, the divergence suggests that large players may be selling into retail buying — a reliable early warning of distribution.
Related Terms
Chaikin Money Flow
Volume-weighted measure of buying/selling pressure over 20–21 periods; positive values suggest accumulation, negative values distribution.
IntermediateForce Index
Combines price direction, magnitude of move, and volume into a single oscillator; crosses above zero signal buying force, below signal selling force.
IntermediateMoney Flow Index (MFI)
Volume-weighted RSI that measures buying and selling pressure; above 80 is overbought, below 20 oversold, over a 14-period default.
IntermediateOn-Balance Volume (OBV)
Cumulative volume indicator that adds volume on up days and subtracts it on down days to reveal whether volume is confirming a price trend.
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