Accumulation distribution oscillator formula

Accumulation Distribution Oscillator ADO

Uncertainty about the origin of the Indicator Accumulation Distribution Oscillator, abbreviated ADO. In some sources he is Larry Williams attributed, in part, ADO is used as a generic term for several forms of a similar indicator calculation and trend forecasters.

For a variety of technical indicators used are the terms Accumulation and distribution. Generally, they are for the existing power purchase or sales force. So there is a picture of the strength of the commitment of market participants who invest in a security or the strength of those market participants who sell or put on falling prices. Reduced to a nutshell of the Accumulation Distribution Oscillator description of the two existing forces attempted, involving the opening and closing price as well as minimum and maximum level of a given trading period. Analyst wants to determine the ADO, if the buying pressure is greater (corresponding market has purchasing power and tends to the top) or the pressure to sell (market trend points downward).

ADO calculated to determine the bullish force the difference from the market opening up to the highest price and adds the difference between the closing price to the lowest price. How now can imagine, this value is at a "good" days can be quite large, in a "bad" day is correspondingly low. The indicator itself is calculated from the ratio of bullish described component and twice the daily trading range:
Formula for accumulation-distribution volume oscillator,
Range (t) = high (t) - Low (t)
ADO (t) = (high (t) - Open (t)) + (Close (t) - Low (t)) / (2 * rank (t))


Calculation. Calculating the Accumulation Distribution Line (ADL) is the first step to the Chaikin Oscillator. In its basic version, the indicator does not have a smoothing component that provides a so-sounding like a saw blade, very jagged picture. The extension is of course no limit to the inclusion of an exponential average is only one of them. Another possibility for refinement is the addition of a signal line and in the indicators of extreme narrowing zones. ADO is in a holding on the two zones, this signals the predominance of the respective market power. In an extreme upper zone there is a strong buying pressure-overhang, while below the selling pressure dominated clear.

As for the concrete interpretation of the whole now are concerned, there are some quite different approaches: Some analysts are hoping the trend of movement to follow as long as possible to participate in it, another possible interpretation is the search for turning points or exaggeration phases with the aim of the following corrections profit to . obtain If ADO in one of the two extreme zones expanding the concept is staying, this could be interpreted as short-term excessive price movement, which implies short sharp course corrections.

The Accumulation Distribution Oscillator (ADO), also called the Chaikin oscillator, Calculation. ADO The practical applicability of the Accumulation Distribution Oscillator is however not so simple, makes sense to one mentioned approach: As an entry filter here is the average of the daily trading ranges defined for a purchase, a rise in the average to be present, for short transactions a fall . As a concrete buy signal can be seen crossing the signal line through the indicator line up in conjunction with an above today's high price on the next day. Analog signal is a short-identify if there is a crossing of the signal line by line down the indicator and the course of the next day under the current low is.