Accumulation Distribution Line

A momentum indicator developed by Marc Chaikin to assess the cumulative flow of money into and out of a security. He decided to focus on the price action for a given period and derived a formula to calculate a value based on the location of the close, relative to the range for the given period. The Accumulation/Distribution Line is based on the premise that a price move is more significant with larger volume. See also: Chaikin Oscillator and Chaikin Money Flow.

Accumulation Distribution Line

Chart courtesy of Prophet Financial Systems