Williams Accumulation Distribution - Indicator Formula

Williams Accumulation Distribution uses divergences to help produce its signals. Distribution is taking place when the price of an asset makes a new high and the Williams A/D makes a lower high. Accumulation is taking place when the price of an asset makes and new low and the Williams A/D makes a higher low.

When there is a bullish divergence - accumulation is taking place - you go long the asset.

When there is a bearish divergence - distribution is taking place - you go short the asset.

To calculate Williams Accumulation Distribution:

Calculate the True Range High and True Range Low

True Range High ( TRH ) is the greater of:

High[ today ]

Closing price[ yesterday ]

True Range Low ( TRL ) is the lesser of:

Low[ today ]

Closing price[ yesterday ]

Compare Closing price to yesterday's Closing price

If Close[ today ] is greater than Close[ yesterday ]

Price Move[ today ] = ( Close[ today ] - TRL )

If Close[ today ] is less than Close[ yesterday ]

Price Move[ today ] = ( Close[ today ] - TRH )

If Close[ today ] equals Close[ yesterday ]

Price Move[ today ] = zero

Multiply the price move by volume

AD[ today ] = Price Move[ today ] * Volume[ today ]

Calculate the cumulative tota

Williams AD = AD[ today ] + Williams AD[ yesterday ]

Related Articles