accumulation

Accumulation / Distribution

Accumulation/Distribution is a momentum indicator which takes into account changes in price and volume together. The idea is that a change in price coupled with an increase in volume may help to confirm market momentum in the direction of the price move.

Note the similarity of this formula to that of the stochastic; this is basically a stochastic multiplied by volume. This means that if the security closes near its high, the volume multiplier will have a greater effect than if the security closes nearer to its low.