Accumulation Distribution

accumulation distribution

✔️ Information reviewed and updated in June 2024 by Eduardo López

To make better financial and investment decisions, it is necessary to know certain statistical data that help us understand the behavior of assets. Statistics allow us to anticipate changes in trends and maximize our results by making decisions supported by reliable information and data. One of the indicators that few usually take into account, but that are very revealing is the indicator of accumulation and distribution. So that you can use it, or understand it if the platform you operate on gives it to you, we will prepare this post. Here we will tell you everything you need to know about distribution accumulation.

➡✨Definition of the indicator accumulation distribution

The best way to see this indicator is in bullish and bearish sessions. For example, in a bullish session, the accumulation will be represented as the distance between the close and the minimum, while we will not have distribution or it will be null. On the other hand, when the session is bearish, the distribution will be represented as the distance between the close and the maximum, while the accumulation will be zero. This indicator is in charge of adding and representing the values ​​of volume, accumulation, distribution, maximum and also minimum. In this way, we can have a more complete reading of the asset's behavior. accumulation

➡✨ What is this indicator for?

The main use that we can find in the movement of this indicator is the changes in prices. For example, if the indicator rises, this means that prices are likely to approach their maximums in the following days. The same happens if the indicator moves down as this reveals that prices are likely to fall close to the bottom. According to experts, the more volumes there are in the asset, the stronger the movement of the indicator will be when it fluctuates with prices.

➡✨ How is the distribution accumulation indicator obtained?

Despite being a relatively simple indicator to use, actually calculating it is not as easy as it sounds. At least the experts recommend that if you are a beginner, do not complicate your life looking for how to calculate your own indicator of accumulation distribution. Most brokers offer this type of indicator within their range of KPIS and indicators which makes our life much easier when looking for information. So you better check if the platform has this indicator in its data list. accumulation

➡✨ What can I use the to indicator forcumulation distribution?

You can use this indicator to try to predict changes in the price of an asset and thus decide if it is time to invest or sell. It is also useful to verify if a general trend in market values ​​is coming. Another of the signals that you can find is a divergence between the prices and this indicator, which is an indication of a potential change in prices. In general, this indicator is one more tool to try to determine the behavior of assets and their value.

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