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THE ACCUMULATION-DISTRIBUTION LINE WAS CREATED TO EVALUATE THE CUMULATIVE FLOW OF MONEY

The Accumulation-Distribution Line was created by Marc Chaikin to evaluate the cumulative flow of money into and out of a security. It created a positive reputation in Currency traders and nowadays it is a common indicator used in your Forex trading platform.

Accumulation-Distribution is a leading indicator of price movements that predicts trends in bullish (which are accumulating currencies) and bearish (which are distributing currencies). It provides a measure of the resistance of bulls and bears in the market and is used to detect divergences between volume and price action, these divergences are supposed to be signs of trend weakening.


This indicator is calculated using the following formula:

Accumulation/Distribution = {(Close Price – Low Price) – (High Price – Close Price)}
(High Price – Low Price) * Period's volume

  • (Close Price – Low Price): is a measure of the Bullish power.
  • (High Price – Close Price): is a measure of the Bearish power.
  • (High Price – Low Price): contains the total set of prices in the timeframe used.
  • Here is an example of the Accumulation-Distribution chart in your Metatrader 4 trading platform:
Accumulation/Distribution