Accumulation/Distribution Percentage (ADP) is used to measure money flow similar to Chaikin Money Flow (CMF) and Money Flow. It is the range-bound version of my previous indicator ADMF. This indicator can be used for analyzing momentum, buy/sell pressure, and overbought/oversold conditions. I believe that this indicator is more accurate than CMF and MFI (I will publish a TA about it one day!).
What to look for: - When this indicator moves up, it means buy pressure is increasing and the other way around for sell pressure. Crossing 0 means that trend has changed in the given period (it is best to look for confirmation of buy/sell pressure in larger TFs) - Overbought above 40 and oversold below -40 (these numbers vary depending on the security. Look for historical levels to determine overbought and oversold conditions of each security) - Regular divergence shows that momentum of a trend is declining. Hidden divergence implies continuation of a trend. The non-bound mode should be more accurate for identifying divergence. - Failure swings can detect potential reversals.
Recommendations: - hlc3 (AKA typical price) as input source might be better than "close" as it captures more information. If you use hlc3 as a source, then change the chart type to line and set hlc3 as the source for identifying divergence. - Use hybrid tickers e.g.(BITFINEX:BTCUSD+COINBASE:BTCUSD+BITSTAMP:BTCUSD)/3. Volume-based indicators are susceptible to wash trading/volume printing and hybrid tickers mitigate this issue. - In non-bound mode, small TFs with longer length should be more accurate than larger TFs with standard length (same is true for many other indicators)
Background:
I have developed 4 indicators based on a simple but elegant concept of A/D ratio. A/D ratio is equal to (current close - previous close)/True Range (when there are no price gaps, True Range = High - Low) 1) What you see on ADV indicator as darker green and red is equal to A/D ratio x volume. 2) ADL indicator shows the summation of ADV 3) ADMF (or ADP in non-bound mode) shows Moving Average of ADV 4) ADP shows relative accumulation strength which is calculated as RMA(accumulations)/RMA(accumulation + distribution). ADP equation is based on RSI equation which is RMA(gains)/RMA(gains + losses). That is why these two indicators look quite similar.
PS: Please leave a like if you find these indicators useful. I am working on improvements on these and other indicators. I am trying my best to keep them as simple as possible. Please let me know in the comments if you want me to make future indicators even simpler.
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Complementary indicators based on the same concept:
when i am changing the timeframe it adjust according to that...what if i want this indicator to set in a particular time frame
tiamo3733
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Thank you for sharing.
sokysoks
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Hi do you have version for mt4?
godsparesh
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Thank you
nckirtikar
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Great work sir plz keep as it is, no need of change Thanks a lots sir for sharing
toptrendtrader
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than you for your great effort. I Just have a question, is there any chance for repainting with this indicator? because its accuracy looks promising
Caner_44
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Can someone write a strategy test?
Omer_Kaygin
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you are awesome
HeadGames
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Thanks.
kyashok
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Dear Sir
Sorry, I am a beginner
I found your comment above " Overbought above 40 and oversold below -40"
I found , over various stocks that the value moves between the range of 0 to 100. So, should we take the values as , say +80 to +20 , instead of +40 to -40 ?
Also, in the INPUT section, there is an option "A/D weight (At 1 all volume is included)" . Is there any reference on how to choose it?