The Accumulation/Distribution Line measures the cumulative flow of money into and out of an asset by examining where price closes within its range relative to volume. Unlike OBV, which only considers whether the close is up or down, the A/D Line weights volume by the close's position within the bar's range, giving a more nuanced picture of buying and selling pressure.
Close Location Value (CLV): measures where price closed within the high-low range. Money Flow Multiplier: (close-low) - (high-close) / (high-low). Rising A/D Line: accumulation — buyers are in control. Falling A/D Line: distribution — sellers are in control. Divergences between A/D Line and price signal potential trend changes.
Enter long when the A/D Line trends higher while price consolidates, indicating stealth accumulation. Buy on bullish divergence — price makes a lower low while the A/D Line makes a higher low. Look for the A/D Line to confirm a price breakout by making new highs alongside price. Enter when the A/D Line recovers sharply from a pullback, showing renewed buying interest.
Exit longs when the A/D Line trends lower while price makes new highs — bearish divergence signals distribution. Close positions when the A/D Line breaks below its support level. Take profits if the A/D Line flattens during a price rally, suggesting exhaustion of accumulation. Monitor for sudden drops in the A/D Line during price stability.
1H, 4H, Daily
The A/D Line's advantage over OBV is its sensitivity to where price closes within the range — a close near the high on moderate volume produces a stronger signal than a close near the middle. Use it alongside OBV for a more complete volume picture. Focus on divergences and trendline breaks on the A/D Line itself for the most actionable signals.
Volume Spread Analysis examines the relationship between price spread (the range of a candle), closing position within that spread, and the accompanying volume to determine the intentions of institutional market participants. Developed from the work of Richard Wyckoff and refined by Tom Williams, VSA identifies accumulation, distribution, and supply/demand imbalances by reading the story that volume and price action tell together.
On-Balance Volume is a cumulative volume indicator that adds volume on up days and subtracts it on down days, creating a running total that reveals whether volume is flowing into or out of an asset. Developed by Joe Granville, OBV often leads price — a rising OBV during a consolidation suggests accumulation, while a falling OBV during a hold signals distribution. The direction of OBV matters more than its absolute value.
Volume Weighted Average Price (VWAP) represents the average price an asset has traded at throughout the session, weighted by volume. It serves as a dynamic intraday fair-value benchmark used by institutional traders to gauge execution quality. For retail traders, VWAP acts as a powerful support/resistance level and trend filter — price above VWAP suggests bullish intraday bias, while price below suggests bearish bias.
Chaikin Money Flow (CMF) measures the accumulation or distribution of an asset over a specified period by combining price and volume data. It oscillates between -1 and +1, with positive values indicating buying pressure and negative values indicating selling pressure. CMF differs from other volume indicators by incorporating both the close location within the bar and the volume, then averaging the result over a lookback period.