PRIVATE MEMBER AREA
VIDEO 19 |
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Using the Accumulation Distribution Indicator.
Developed by Marc Chaikin, the Accumulation Distribution Line is a volume-based indicator designed to measure the cumulative flow of money into and out of a security. Chaikin originally referred to the indicator as the Cumulative Money Flow Line. As with cumulative indicators, the Accumulation Distribution Line is a running total of each period's Money Flow Volume. First, a multiplier is calculated based on the relationship of the close to the high-low range. Second, the Money Flow Multiplier is multiplied by the period's volume to come up with a Money Flow Volume. A running total of the Money Flow Volume forms the Accumulation Distribution Line. Chartists can use this indicator to affirm a security's underlying trend or anticipate reversals when the indicator diverges from the security price. I found the best way to use this indicator is to use line studies that we will be using further into the course. This can simply be done by joining a lower high to another lower high or vice versa, joining higher lows to higher lows. And taking the breakout. Option 1: Download the video (Right-click and save the MP4 file to your computer) Option 2: Watch the video online *The video may not play in all browsers. If you are unable to play the video, use option #1 to download the video, or try a different browser (Internet Explorer, Chrome, etc.)
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