The Accumulation/Distribution Pressure Volume study is used to evaluate strength of the trend by finding divergences between price plot and the indicator itself. It is calculated using the following algorithm:
- Open price is subtracted from the Close price;
- The difference is divided by price range;
- The ratio is multiplied by volume;
- The final result is equal to cumulative sum of the values found.
The divergence between the price plot and the indicator might indicate trend weakness and subsequent reversal.
||The Accumulation/Distribution Pressure Volume plot.|
*For illustrative purposes only. Not a recommendation of a specific security or investment strategy.