Accumulation/Distribution Line

Overview

The Accumulation/Distribution (A/D) line uses both price and volume to assess whether a security is being accumulated (bought) or distributed (sold) — a refinement on OBV that considers where price closes within the bar. A/D divergence is a powerful early signal for stock and crypto traders who want to spot institutional moves before the crowd. Integrate A/D analysis into your trading strategies alongside price structure for higher-confidence entries. Explore more volume tools in our complete indicator guide library.

How It Works

Money Flow Multiplier = [(Close − Low) − (High − Close)] / (High − Low). Money Flow Volume = MF Multiplier × Volume. A/D Line = previous A/D + current Money Flow Volume. Closes near the high with high volume push A/D up.

Key Signals

• Rising A/D with rising price confirms a healthy uptrend.
• Falling A/D with rising price warns of hidden distribution (bearish divergence).
• A/D breaking to new highs before price suggests an impending breakout.
• Sustained A/D decline during a flat market precedes breakdowns.

Common Mistakes

• Comparing A/D line values across different securities — only the trend matters per instrument.
• Using A/D on markets with gaps (it accounts for intra-bar position, not gap volume).
• Not combining A/D with price structure — divergence alone isn't a trade signal.