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GBPUSDAs a student in the financial markets, learning about the market is interesting and it's a long journey to begin with. GBPUSD having a accumulation, manipulation and now waiting for a distribution. Will GBPUSD make a move early next year along side with USA rate cuts? Let's see what year 2024 lead us to I don't post much as I'm not a signal provider nor a financial advisor. But one thing is that learning how the market behaviour, reactions and structure, it's simply interesting to me. If you have any thoughts on GBPUSD, let me know down the comment area, let's discuss about it. This will be my last post and trade of the year 2023 holding it till next year 2024. Wishing you guys out there trade safe and happy new 2024.
Long
by Student_of_Forex
2
YFI Huge Fakeout ! Yearn Finance (YFI) has orchestrated a strategic move, executing a feigned breakout from a descending triangle—a bullish pattern that saw a swift sweep of the $14,000 level. In this analysis, we unravel the narrative behind YFI's tactical retreat, its implications, and the anticipated journey back into accumulation. Chart Analysis: The Intricate Dance of YFI YFI's recent price action presents a nuanced storyline on the charts, characterized by a false breakout and a subsequent retreat into a potential accumulation zone. Key Observations: Feigned Breakout from Descending Triangle: YFI exhibited a false breakout from the descending triangle, creating an illusion of bearish momentum. The rapid sweep of the $14,000 level marked a calculated move to trigger liquidity. Retreat into Accumulation: Following the feigned breakout, YFI is retracing back into what appears to be an accumulation zone. Accumulation zones are often strategic areas where institutions and savvy traders gather positions. Critical Levels: YFI's Recharge at $14,000 Strategic Retreat and Accumulation: The retreat from the false breakout aims to accumulate positions at a key level. $14,000 emerges as a critical zone for replenishing liquidity and preparing for the next move. Potential Scenarios: YFI's Journey Back to Prominence Accumulation and Strategic Reentry: The retreat into the accumulation zone sets the stage for strategic reentry. Savvy traders may position themselves within this zone, anticipating a renewed bullish surge. False Breakout as a Tactical Move: YFI's false breakout could be interpreted as a tactical move to shake out weak hands. The subsequent accumulation phase may serve as preparation for a more sustained bullish advance. Trading Strategy: Navigating YFI's Tactical Landscape For traders considering YFI in their strategy: Accumulation Zone Entry: Assess entry opportunities within the identified accumulation zone. Monitoring $14,000 Level: Keep a close eye on the $14,000 level for potential confirmation of strategic moves. Risk Management: Implement risk management strategies to navigate the inherent volatility. Conclusion: YFI's Strategic Maneuver and the Road Ahead As YFI retraces from its feigned breakout, the narrative suggests a strategic accumulation phase underway. Traders are poised for potential bullish movements as YFI recharges at the $14,000 level, highlighting the intricate dance between feints and strategic positioning in the crypto arena. 🚀 YFI Analysis | 🛡️ False Breakout Tactics | 🔄 Retreat into Accumulation ❗See related ideas below❗ Share your insights and analyses on YFI's tactical retreat in the comments, contributing to the collective intelligence of the crypto community. The journey through false breakouts and strategic retreats adds layers of complexity to the YFI saga. 🌐📈🚀
Long
by Yaroslav_Krasko
NQ Power Range Report with FIB Ext - 11/30/2023 SessionCME_MINI:NQZ2023 - PR High: 16050.25 - PR Low: 16037.00 - NZ Spread: 29.75 Key economic events 08:30 | Core PCE Price Index (x2) - Initial Jobless Claims 10:00 | Pending Home Sales Another day of virtually no change - Maintaining weekly range - Failed breakout attempt above 16180 supply zone Evening Stats (As of 1:55 AM) - Weekend Gap: N/A - Gap 10/30 +0.47% (open < 14272) - Session Open ATR: 200.87 - Volume: 28K - Open Int: 280K - Trend Grade: Neutral - From ATH: -4.2% (Rounded) Key Levels (Rounded - Think of these as ranges) - Long: 15247 - Mid: 14675 - Short: 13531 Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
CME_MINI:NQZ2023Long
by mv3trader5
🔥 Bitcoin In Wyckoff Distribution: Top Is In?Over the last couple of week's I've been very bullish on the market. My 40.000 thesis for this year is still my personal most likely scenario, but that doesn't mean that we can't look at the market from a more bearish perspective. So, in this analysis I want to take a look at a bearish Bitcoin scenario that might be playing out at the moment. Bitcoin might be trading in a Wyckoff distribution pattern. As seen on the chart, the BC/UT/UTAD are nearly identical as on the schematic. Three higher-highs, of which the first two are sold off quickly, and the last (UTAD) took a while before it turned bearish. AR and SOW are also fairly identical to the schematic. Difference is that we had two retests of the AR-low between UT and UTAD. In the end, the schematic is just a schematic and the market will rarely follow it exactly. I'm interpreting it more as a guideline instead of an exact science. Were this pattern to play out, Bitcoin will likely retest the SOW area in the near future, and likely fall through the SOW support. This would also mean that 38.4k is the 2023 top, with a move towards 30.000$ being fairly likely. Like mentioned before, I'm still bullish on the market. However, it's important to spot bearish signs when they are there. The fact that we had three higher-highs which were all sold off is alarming at the very least. Time will tell if this pattern will play out. For now, keep your eyes open and be watchful. Share your thoughts in the comments, interested to see what the community thinks of this pattern.🙏
Short
by FieryTrading
30
TVK: Accumulation Manipulation and Distribution to $0.16Exciting developments in the crypto space as TVK (ThetaFuel) follows a trajectory similar to LINK, experiencing a prolonged accumulation phase within a range. The recent shakeout below the range, swiftly followed by a sharp recovery back within, sets the stage for a potential upward move. Anticipating a retest at the 0.5 imbalance level around $0.036, with the first target set at $0.16. Let's delve into the details. 📈💼 TVK's Accumulation Breakout: Range-Bound Accumulation: TVK has undergone an extended period of accumulation within a defined range, resembling the scenario observed with LINK. Shakeout and Recovery: A recent shakeout below the range swiftly followed by a sharp recovery back within signals a potential accumulation breakout, reminiscent of LINK's historical movements. Key Price Levels: Retest at $0.036: Anticipating a retest at the 0.5 imbalance level around $0.036. This level serves as a critical point to observe for confirmation of the bullish momentum. First Target: $0.16: Upon successful retest and confirmation, the first target is set at $0.16. Achieving and sustaining this level could pave the way for further upward momentum. Trading Strategy: Observing Retest: Patiently observe the retest at $0.036, ensuring it aligns with supportive price action and volume for confirmation. Strategic Entry: Consider strategic entry points based on the confirmed retest, aligning with your risk tolerance and trading strategy. Risk Management: Implement risk management tools such as stop-loss orders to mitigate potential downside risks. Conclusion: TVK's accumulation breakout, resembling the pattern seen with LINK, presents an exciting opportunity for traders. A retest at $0.036 followed by a potential rally to $0.16 is on the horizon, offering a dynamic landscape for crypto enthusiasts. Wishing you successful trades on the TVK journey! ❗️Get my 3 crypto trading indicators for FREE! Link below🔑
T
by AlexWhale
Go woke go broke? - Anheuser Busch From a technical perspective, Anheuser-Busch InBev (AB InBev) presents an attractive opportunity due to a substantial drawdown of over 20% since April, attributed to a perceived shift toward 'wokeness.' This phenomenon, commonly expressed as "go woke go broke," often reflects boycotts against companies embracing diversity, equity, and inclusion, or, in AB InBev's case, partnering with transgender influencers. However, this negative sentiment has potentially led to AB InBev being undervalued. The uniqueness of this situation lies in AB InBev's diverse brand portfolio. Many of its brands are not immediately associated with the company, and while certain recognizable ones may face boycotts, the other brands continue to thrive. Notably, several of these brands hold higher market values than the more affordable ones that have been boycotted, which suggests that this strategic diversity could benefit the company. Additionally, as the outrage associated with 'wokeness' appears to be subsiding, AB InBev may find itself in a more favorable market position. Furthermore, in times of economic uncertainty or conflict, consumer demand for alcoholic beverages typically increases, and AB InBev's comprehensive product range positions it well to meet this potential surge in demand. Price Levels: Strong Support: $49.80 First Resistance $59.90 Target 1: $65.80 Target 2: $88.93 Long-Term Target: $106.00
NYSE:BUDLong
by Helios_Capital_Investment
📈 Ethereum's Wyckoff Accumulation 📈Understanding Wyckoff Patterns: A Brief Overview Richard D. Wyckoff's trading methodologies have stood the test of time. These patterns are characterized by phases of accumulation, manipulation, and distribution. Ethereum's 4H Chart: A Wyckoff Tale On Ethereum's 4H chart, we see signs of accumulation, where smart money starts buying. The next phase could be marked by manipulation, with price swings often seen as tests. Following this, distribution may occur as the price rises to a certain level. The Anticipated Outcome: A Bullish Move Wyckoff patterns often conclude with a bullish move. Traders are eyeing this setup for a potential uptrend in Ethereum's price. Trading Strategy: Navigating the Wyckoff Path Traders may consider entering or adding to positions during accumulation. Caution is advised during the manipulation phase, as price swings can be volatile. Distribution may be a signal for some traders to take profits. Conclusion: Wyckoff Wisdom on Ethereum's Journey Understanding chart patterns like Wyckoff can provide valuable insights into market dynamics. Ethereum's 4H chart currently reflects this classic pattern. While it suggests potential upward movement, traders should always exercise caution and use risk management strategies. Crypto markets are known for their volatility, so stay informed, adapt to changing conditions, and trade wisely. As we watch Ethereum's Wyckoff-style journey unfold, remember that trading is both an art and a science, and every move should be calculated. 📊🚀🌐 ❗See related ideas below❗ Don't forget to like, share, and leave your thoughts in the comments! 💚🚀💚
Long
by Yaroslav_Krasko
1
XRP Bull Breaker - Alternate View By Popular Request (5:1 Short)My most popular idea by far, with over 70 comments in half as many hours, is this one, which I've revised in order to show the Trend Exhaustion details w/in the AVWAP Array on the 1D chart. Again, if you are a long term Bull, you won’t like it, and yet since I operate by the Steel Man principle, I welcome your toughest questions and chart-based counter-arguments. As I always, I strive to render my ideas so that I need no words to explain them, although I can (and do) write detailed paragraphs (elsewhere). Anyways, in the medium term, I expect price to fall to the $0.3785 shown here, which also marks the Point-of-Control from the last major swing low. Price Action already tested the positive 3rd Standard Deviation of the AVWAP from the same reference point, as shown, and will, by degrees, retest the negative 2nd Standard deviation below (+/- $0.22 USD as of this writing). The stop loss shown here is discretionary and conservative, and should be revised for current conditions if you are considering a short trade. Closer study on lower timeframes may reveal a better entry or stop loss as the chart unfolds over time. Hopefully this version clarifies a few details for the confused. In practice, the Trend Exhaustion Wedge reveals stop loss and profit targets for day traders on the lowest time frames (minutes, even seconds), which are, by nature, moving targets on any given day. The AWVAP Array, on the other hand, is dynamic, and prints according to the timeframe, unlike the trend lines. I intend to start live-streaming soon, so feel free to ask questions if you have any. Critical thinkers only ... XRP-Trolls need not apply. Until then, be liquid!
BINANCE:XRPUSDShort
by TheLeadingIndicator
13
XRP Bull Breaker - 7.77:1 Short + Longterm ForecastI just finished a complete overhaul of my XRPUSD chart, a portion of which is on display here in order to publish my medium and long range forecasts for this most “distributive” of digital assets. If you are a long term Bull, you won’t like it, and yet since I operate by the Steel Man principle, I welcome your toughest questions and chart-based counter-arguments. As I always, I strive to render my ideas so that I need no words to explain them, although I can (and do) write detailed paragraphs (elsewhere). Anyways, in the short term, I expect price to fall below the $0.3785 shown here (purely for the 7.77 R-Value) down to ~ $0.34, then to ~ $0.28 in the medium term and finally to ~ $0.22 at or near the next BTC Halving event. From there your eye leads up to the Trend Exhaustion Limit and retraces until the end of 2025. Three years later, if my forecast is correct, there will be a final speculative peak, after which price should level off to some stable range of intrinsic value of ~ $5.89 throughout the next decade. Obviously, this chart is not tradable, per se, and serves instead as an an introduction and reference point for lower timeframe ideas and videos I intend to publish. The complete chart has many granular details for targeting stop losses, and new details will be constantly updated (and erased) as price action unfolds. Until then, be liquid!
BINANCE:XRPUSDShort
by TheLeadingIndicator
92
Distribution Curves and Investing I recently released an indicator called the Cumulative Distribution Density of Dataset indicator. One of the main highlights of this indicator is its, at the time of writing, the only indicator available on Tradingview/Pinescript that assesses the degree of normality as well as the type of distribution of a ticker, index or economic variable. Before this, you would need to export data into a statistical package such as Excel, SPSS, R or SAS to perform such an analysis. So I figured its probably time to talk about the bell curve again. Some of you may remember, I released an educational video called “Trading Using Bell Curves”: In this video, I discuss the implications of using bell-curves for trading. However, I want to reel it back and talk more specifically about distributions and trading, and why you, the investor and/or trader, should be paying attention to them. This is something I honestly have never seen talked about and really, you are doing yourself a huge disservice as a trader AND an investor for ignoring it. so let’s get into it! But before we start, I won't review the basics of the bell curve, but if you are interested, consider watching the video above. Alright, now on with the math! Understanding stock distributions, which come in various forms such as leptokurtic, platykurtic, and more, will provide you with valuable insights into market behavior and risk management. Did you know that certain distribution types can alert you that a stock generally has an unstable trajectory? And by looking at the distributions, you can also tell which stocks are more prone to aggressive crashes and which are more stable? Well you can, and I am going to teach you how! So let’s go over the main types of distributions in stocks and their implications for you as a trader. Types of Stock Distributions Normal Distribution This is probably the one you hear talked about a lot. A normal distribution, also known as Gaussian distribution or bell curve, is characterized by its symmetrical shape. In a normal distribution, the mean, median, and mode are all equal, and data points are evenly distributed around the central value. This distribution tends to be common in nature but tends to be not all that common in long term stocks. There are some exceptions; however. For example, NYSE:BAC (Bank of America) actually has a normally distributed dataset from initial listing to now: When stock returns follow a normal distribution, it becomes easier to predict future price movements and assess risk more easily. One way to do this is by using the cumulative distribution function (or CDF). Which is a mathematical function that provides the probability that a random variable takes on a value less than or equal to a specific value. For example, if we have 10 students with various test scores, we can plot all test scores using CDF and determine what the probability is that a random student’s test score will be above 90% or below 20%. We can visualize this on NYSE:BAC by having the indicator plot the CDF for NYSE:BAC : The image above plots the CDF distribution for NYSE:BAC on the monthly timeframe since its IPO. Because BAC is normally distributed, we can place a high level of confidence in the results of the CDF. We can also use the CDF to our advantage. How? By planning where we could buy. We should buy when the price is at a level where 50% to 60% or more of the time the price will fall above. Turning back to our BAC example, we can display this with a simple trendline: We can also operate on the assumption that NYSE:BAC is likely to go lower from here. Why? Because the normal distribution is not yet invalidated. As of right now, BAC retains a normal distribution. Thus, we can expect BAC to cycle back down to bring its CDF back towards 50% and 60%. We can see another example below, AMEX:XLE : Key Points for Tickers that are Normally Distributed: They tend to be more cyclical, having periods of sustained decline, followed by periods of sustained rise. They are the most stable and predictable type of ticker to invest or trade in, but tend to be general underperformers (because of their cyclical behaviour of decline and then rise). However, this is not always the rule, the advantage to a normally distributed ticker is you can calculate your likely returns to a high degree of accuracy! Some examples of stocks that have a normally distributed history are NYSE:T (AT&T), NYSE:BAC (Bank of America), AMEX:XLE (Energy ETF), T-Mobile and $BABA. You will generally notice that, if a ticker in one industry is normally distributed, chances are other tickers in the same sector is as well, even international tickers in the identical sector. For example, T-Mobile (TMUS), T (AT&T) and TSX:T (Telus) all are telecommunication providers and all have normally distributed data. They respond very well to log-linear and linear regression methods. But what about other distributions? Let’s talk about them. Leptokurtic Distribution A leptokurtic distribution is characterized by a higher peak and fatter tails than a normal distribution. In this distribution, extreme events, such as market crashes or rapid price spikes, are more likely to occur compared to a normal distribution. From my experience, most stocks fit this description, but one of major note is NYSE:BA : Leptokurtic distributions indicate higher volatility and a higher likelihood of extreme price movements. In general, you need to be more cautious with leptokurtic distributions because there is generally heightened volatility. A CDF on a leptokurtic distribution is not as clean, as we can see from plotting BA’s CDF: Because BA’s distribution is not normal, the CDF becomes slightly unreliable and we cannot employ the 60% rule. So can we still use the distribution to help us gauge entries? Yes! We can! However, it’s a bit more nuanced with leptokurtic distributions. The first thing to remember with leptokurtic distributions is… they crash… a lot. We can see this with BA: The flags in this chart represent areas BA has crashed. Crashes in leptokurtic distributions are usually characterized by a drop on the CDF of the probability a stock will go lower to around 75% to 85%. We can see this if we overlay the CDF for BA with the chart: These are the dips you would want to buy in a leptokurtic distribution. If we take a look at another example, AMD: Key Takeaways from Leptokurtic Tickers: They are among the most unstable tickers and experience among the most crashes. Your risk as an investor is heightened on any ticker that is leptokurtic. They do not respond well at all to log-linear or linear regression methods. Unlike normal distributions, leptokurtic distributions don’t generally follow sectors and they tend to be company specific tickers (which explains their proneness to crashing and volatility). Some major examples of leptokurtic distributions are NYSE:BA , NASDAQ:AMD , NASDAQ:MSFT , Platykurtic Distribution A platykurtic distribution has a flatter and wider shape compared to a normal distribution. In this case, the data points are more spread out, and extreme events are less likely to occur. As such, platykurtic distributions suggest lower volatility and a more stable market environment. However, it is important to know that prolonged periods of low volatility can be followed by sudden spikes, leading to unexpected market movements. These are extremely rare distributions that I have not observed in any of the tickers I have traded. However, theoretically, platykurtic distributions would come in smooth waves up and down. We can visualize this if we look at SPY’s January 2022 highs till its October lows. This was a platykurtic, negative distribution (indicating a stable downtrend): Because platykurtic distributions are cyclical, you long on the bullish peaks when the probability of higher prices is >= 90% and short on the bearish peaks when the probability of downside is >= 90%: However, this is not at all prevalent or observed in stocks ever, so you would be lucky to find a platykurtic distribution! Key take aways from Platykurtic distributions: Playkurtic distributions, theoretically, are cyclical like the normal distribution, which make them more stable. They would be similar to normally distributed tickers in their under-performance, but superior in their ability to not generally experience equal rises and declines. Skewed Distribution A skewed distribution is asymmetric, with a longer tail on one side. Positive skewness means the tail is on the right (indicating more extreme positive values), while negative skewness implies a left tail (indicating more extreme negative values). Skewed distributions can signal a bias in market sentiment. For example, positive skewness may indicate a bullish bias, while negative skewness may suggest a bearish bias. While many people look to EMAs or trendlines to identify long-standing bull or bear markets, its actually not necessary, you can ascertain this simply from the distribution. If we take a look at SPY: This is SPY’s distribution since the IPO. We can see that it has a positive skewness (right tail), with extreme outliers. This signals to us, the investors, that SPY has been in a bull run since its IPO. Despite multiple corrections and bear markets, SPY retains the distribution characteristic of a bullish stock. In fact, SPY frequently experiences extremely positive outliars (outliars to the upside) more often than extremely negative outliars (crashes to the downside). This is observed with its positive skewedness. Planning entries on a positively or negatively skewed ticker is a bit more difficult. Crashes substantial enough to bring the probability of going higher to 50% or more tend to be rare (see image below): So when you are dealing with a positively skewed stock, its best to apply alternative, complementary strategies to determine entries, such as using regression channels, longer running EMAs or time series modelling. You can still use CDFs, but you will need to focus on a narrower timeframe. For example, if we plot SPY from its January high to the current day, we can see the data is normally distributed and thus can refer to our parameters for entry on a normal distribution: Key Takeaways from the Skewed Distribution: The Skewed distribution are going to net you your returns (assuming, of course, the ticker is POSITIVELY skewed). These are the tickers that tend to experience exponential growth and returns. Skewed distributions tend to outperform other distribution types, but not without risk. Skewed distributions have an inherent tendency to see dramatic outliars either up or down. Unlike a leptokurtic distribution which is more prone to crashes, a positively skewed distribution is more likely to experience extreme outliars to the upside (meaning bull runs) than to the downside. However, a negatively skewed distribution is more likely to experience more frequent and dramatic drops to the downside than to the upside. So pay attention to the skewness! If it is negative, the risk of a downturn is greatly augmented. Skewed distributions respond reasonably well to log-linear and linear regression methods. Famous example is AMEX:SPY of course! Conclusion While I didn’t cover all possible distributions, I did cover the main ones to pay attention to. However, I hope you now have a better understanding and appreciation for the importance of paying attention to the distributions of stocks. The importance of this is often underestimated but it is, in fact, a crucial aspect of successful investing and trading. Various distribution types, such as normal, leptokurtic, platykurtic, and skewed, provide valuable insights into market behavior and risk assessment. Investors and traders who take the time to understand these distributions can make more informed decisions, manage risk effectively, and enhance their overall success. Thanks so much for reading and hopefully you learned something! Safe trades and, as always, feel free to share your questions and comments below :-). By the way, the indicator is linked below if you would like!
NYSE:BACEducation
by Steversteves
4
ATOM Looks Bullish!!Long Entry Trigger Cosmos Has found support above a pivot low and has also swept those lows. Buying pressure seems to have come in and it's now consolidating above support. The most probable outcome is that the price moves a little higher from here. -------------------------------------------------------------------------------------------------- Every day the charts provide new information. You have to adjust or get REKT. Love it or hate it, hit that thumbs up and share your thoughts below! Don't trade with what you're not willing to lose. Calculate Your Risk/Reward! This is not financial advice. This is for educational purposes only.
Long
by Navitility
REN/USD Main trend. Accumulation 637. Distribution 637.Logarithm. Time frame 1 week. The main trend. The psychology of accumulation and distribution zones. The graph shows and describes the logic of work in the accumulation and distribution zones of large and small market participants (fuel). Coin as an example. It's always the same. But, always those who are “market fuel” are sure: "This time it will be different. But, no miracle happens. It's always the same. “Market fuel” changes cycle after cycle. Most people's memories are short. Many people think they're special, or the timing is wrong... but it's always the same. In distribution, they willingly buy expensive. In the accumulation on the contrary, afraid, waiting lower, lower and so on... Project and News Ren is an open protocol that allows value to move between blockchains. RIP-000-018: Financing Ren 2.0 and the Ren Foundation Early last year, Alameda acquired Ren in partnership with Ren's previous management to provide long-term development funding. Also, after the story with Alameda (scam, trial) in the network REN 1 will be shut down (waiting for the right moment according to the general market trend), the new network REN 2 will be launched. Read more on the project website itself (read between the lines). ICO price 02 2018 ICO: 17200 REN = 1 ETH. Now the price of ETH is about $ 1200, therefore, the price of the ICO in conversion to USD will be REN 0.069, which is slightly lower than the current price of 0.063 Linear graph Secondary trend. Time Frame, 3 days. The secondary trend is distinctly downward. A downward wedge is forming. From the peak, the price decreased by -95% at the moment. This is very much, but if you consider the inadequate pumping of +11,000%, it is normal. Think about it, the distribution has been 1.76 years. Many people got used to the “stable” price for such a long time and over time were no longer afraid to buy “cheap” because from the support of the distribution pumped by a significant % repeatedly. Also note that the accumulation and distribution over time of duration are identical. I showed the maximum local pumping from the key support zones when the wedge is broken, i.e. the exit from the downtrend. Let me remind you that at the moment the trend has a pronounced downtrend. You can work positional trading from the average buy/sell price of the medium/long term, or you can wait for the price to exit a downtrend, that is, to exit a wedge with significant buyer volume. In order to understand further work, and the potential, figure out what manipulation REN1 - REN2 coin holders want to do.
R
by SpartaBTC
34
How to Use the Accumulation/Distribution IndicatorLearning how to identify accumulation and distribution in an asset is an important skill to have for any trader. Luckily, there’s a handy tool we can use: the aptly-named Accumulation/Distribution indicator. In this article, we’ll show you how this accumulation/distribution indicator works, where it’s best applied, and how you can combine it with other tools to boost your odds of success. What Is the Accumulation/Distribution Indicator? The accumulation/distribution indicator, also called the accumulation/distribution index, accumulation/distribution line, and abbreviated to A/D, is a cumulative indicator that uses price and volume data to measure the strength of an asset’s trend. It helps traders identify buying and selling pressure in the market and can show whether an asset is likely to continue trending or is due for a reversal. It was created by renowned trader Marc Chaikin, who also developed the famous Chaikin Money Flow indicator. Accumulation vs Distribution Accumulation occurs when buying pressure outweighs selling pressure, resulting in price appreciation. Conversely, distribution is where sellers have the upper hand over buyers, creating downward momentum. In practice, the plotted A/D line will move up when accumulation is present and down when distribution occurs. Accumulation/Distribution Oscillator Formula and Components The ADI seeks to quantify an asset's buying and selling pressure by considering its trading range and trading volume. First, it calculates the Money Flow Multiplier (MFM) using the following formula: MFM= ((Close−Low)−(High−Close)) / High−Low This results in a reading between -1 and 1. When the price closes in the upper half of its high-low range, the MFM will be positive. If it closes in the lower half, then MFM will be negative. In other words, if buying pressure is strong, the MFM will rise, and vice versa. Second, it generates the Money Flow Volume (MFV) with the following: Money Flow Volume = MFM × Volume For the first candle in a given chart, the MFV is the first A/D value. Since the indicator is cumulative, the MFV is added to the previous A/D value. In essence: First Calculation = (ADI = MFV) Subsequent Calculations = (ADI + MFV) This then creates the A/D line. While it may seem unnecessary to know the formula, it can provide us with significant insight into how an accumulation/distribution rating is given. For example, a strong bullish trend may cause an asset to close high in its trading range, producing an MFM reading close to 1. If this is backed up by high volume, the A/D line will surge upward. However, if the volume is lacking, then the A/D may only increase slightly. Thankfully, we don’t need to perform this calculation ourselves. With the free TickTrader platform we offer at FXOpen, you’ll find the accumulation/distribution indicator and dozens of other tools ready to help you navigate the markets. How to Use the Accumulation Distribution Indicator There are three popular ways to use the A/D indicator: identifying reversals, trend confirmation, and trading breakouts. Identifying Reversals One of the most effective uses of A/D is to spot potential reversals using divergences between the price and the A/D line. A bullish divergence occurs when the price falls, making lower lows, while the A/D line trends upward, creating higher lows. Conversely, a bearish divergence can be seen when an asset makes new highs, but the A/D puts in lower highs. It essentially shows us that while the price is moving in a specific direction, the underlying pressure supporting the move is waning. The example above demonstrates that fewer sellers are participating as the trend progresses lower; eventually, buyers take over and push the price much higher. Trend Confirmation A/D line can also be used to confirm the direction of a trend. In this context, traders monitor the alignment of the line with the price action. In an uptrend, both the price and A/D should be rising. If the A/D moves in the same direction as the price, it confirms the strength of the uptrend and suggests that the buying pressure is likely to continue. As in the chart, traders could have used the A/D and price alignment to position themselves in the direction of the bull trend. Similarly, during a downtrend, the price and the A/D should be falling. If the A/D is falling alongside the price, it indicates that the selling pressure is strong, and the downtrend is likely to persist. Trading Breakouts Lastly, A/D can help traders confirm breakouts beyond support/resistance levels. If there’s a critical level that a trader is watching to jump in on the breakout, a breakout beyond a similar level in the A/D indicator can signal the start of a new trend. In the example, we see a strong resistance level, both in price and the accumulation distribution chart. As the move is confirmed by A/D, breaking out above both dashed lines, traders have confidence that the price is ready to move higher. Integrating the Accumulation and Distribution Indicator with Other Tools While the A/D indicator is a valuable tool on its own, it’s best to use it in combination with other indicators to help filter out false signals and improve the accuracy of your predictions. Let’s take a look at two indicators to integrate with A/D: moving averages and the Relative Strength Index (RSI). Moving Averages Moving averages are a popular tool used by many traders to determine the direction of a trend, especially when two moving averages cross over. As mentioned, the trajectory of the A/D line can show traders that a trend is supported by volume; similarly, a price sitting above or below a moving average can indicate a trend’s direction. Using the two together can provide an at-a-glance reading of a trend, which can be extremely useful for trend-following traders. In this example, we’ve used the Exponential Moving Average (EMA) cross indicator in TickTrader, with two 20-period and 50-period EMAs. The fast EMA crosses above the slow EMA, showing that a potential bullish trend is forming. The price continues to stay well above the 50-period EMA as time progresses, demonstrating that there’s a strong bull trend. We also have confirmation from the A/D line that the bullish momentum is backed up by supporting volume. Seeing this, traders can be confident that the trend will continue. When the EMAs cross over bearishly, as seen on the right-hand side, traders may start looking for the A/D line to confirm that a bearish trend has started and exit their position. RSI Similar to the A/D indicator, RSI can be used to both spot divergences and confirm trends. The divergences are the same as A/D; a lower low in a price with a higher low in the RSI indicates a potential bullish reversal, while a price making a higher high and a lower low in RSI is regarded as bearish. Meanwhile, an RSI reading above 50 is typically seen as bullish, while below is bearish. Using the two indicators together can offer traders extra confluence that the market is headed in a particular direction. In the chart shown, we can see that the price is making a lower low. However, the Apple stock’s accumulation/distribution line shows a bullish divergence, as does the RSI. Traders could have marked the most recent area of resistance (dashed line), and then waited for the price to break out above it before looking for an entry. This move was confirmed by the RSI moving above 50, showing that bullish momentum is truly entering the market and offering multiple factors of confluence. What to Do Next You now have a comprehensive understanding of the accumulation/distribution indicator, including its formulation, its three main uses, and how to combine it with other indicators for extra confirmation. Ready to put your newfound knowledge to the test? You can open an FXOpen account to apply what you’ve learned and hone your trading skills across a diverse range of markets, from forex and commodities to stocks and indices. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
3
ABBV more probable to go down first before reaching ATHThis idea is based on Wyckoff's method for determining price objectives using the Point & Figure count of distribution ranges. We can a distribution ranges following schematic 2 for Wyckoff's distribution. If we take count the ranges separately, this yields a potential reversal zone between 118.50 and 94.50 dollar per share. Personally I am intend to buy if price reached 106.50 (mid point) All other information is on the chart. Good luck, NQDecipher
NYSE:ABBVShort
by NQunlocked