Accumulation/Distribution (Chaikin)
A/D allocates each day's volume by where the close landed in the range: closes near the high book as accumulation, near the low as distribution — the ledger of money flow.
What it is
The Accumulation/Distribution line (A/D), refined by Marc Chaikin: each day's volume is weighted by the Close Location Value (CLV) — where the close sits inside the day's high-low range. Close at the extreme high = CLV +1 (all accumulation); extreme low = −1 (all distribution); midpoint = 0. A/D = Σ(CLV × Volume). It is the raw ledger of money flow: a rising line = net accumulation, falling = net distribution.
Origin
A/D was inspired by Joe Granville's OBV and refined by Marc Chaikin in the 1960s–70s — Chaikin disliked OBV's crudeness (closes up 0.1% and 3% book identically) and replaced it with position-in-range weighting. A/D is the foundation of the Chaikin family: the famous Chaikin Money Flow (CMF) and Chaikin Oscillator are derived reads. MT5 ships it as iAD.
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The computation chain:
CLV ranges −1 to +1: a close in the top quarter of the range → +0.5, midpoint → 0, bottom quarter → −0.5. Note the gap behavior: the daily calculation ignores the previous close — a big gap-up bar's weight depends solely on that day's range, a key difference from OBV (which only compares closes).
Worked example
An example of position weighting:
- Case A: the day traded 100–110 and closed at 109 — CLV = (9−1)÷10 = +0.8: 80% of the day's volume books to buyers.
- Case B: the same 100–110 range, but price spikes to 110 and fades to close at 102 — CLV = (2−8)÷10 = −0.6: the same high, yet 60% books to sellers!
- A/D accumulates these close-position × volume entries — bookkeeping every day's fight.
The same price path can book completely differently depending on where closes land — A/D captures who won the intraday fight, far finer than OBV's binary close comparison. A heavy-volume spike-and-fade bar leaves a visible negative dent.
How to read it
Reading the cumulative line (no fixed range):
| Range | Common interpretation |
|---|---|
| A/D persistently rising | Net accumulation — money flowing in, a bullish backdrop |
| A/D persistently falling | Net distribution — money flowing out, a bearish backdrop |
| A/D diverging from price | Price new highs without A/D new highs — the rally lacks real buying (the core use) |
| A/D breaking its own trendline | A money-flow switch — often leads the price trendline break |
| A/D flat while price churns | Balanced money — a range; accumulation and distribution offset |
A/D is cumulative — absolute values are meaningless (never compare across symbols or periods). The only reads are direction, slope and divergence. There are no OB/OS lines; every signal comes from the curve's shape versus price.
Common signals & usage
A/D top divergence
Price new highs without an A/D new high — the rally lacks real buying: the classic Chaikin top warning.
A/D bottom divergence
Price new lows without an A/D new low — selling lacks real volume (or someone is absorbing): a rebound brewing.
A/D trendline break
Draw trendlines on A/D — its break often leads the price trendline break by days (money moves first).
Direction on heavy days
The CLV sign on giant-volume bars reveals the big money's stance — consecutive heavy days with the same A/D direction = a persistent institutional move.
Limitations & common mistakes
- The gap blind spot: the daily weight only sees the close inside the day's range — a bar that gaps up hugely then drifts may book ~0 despite clearly bullish intent (yesterday 90, open 105, close 105).
- The tick-volume caveat: forex/CFD volume is quote-tick count — the ledger logic weakens under tick convention; stocks/futures are more reliable.
- The arbitrary anchor: the absolute value depends on when accumulation started — read direction and shape only, never values.
- Family confusion with CMF/MFI: CMF (the 20-period averaged A/D ratio) and MFI (a typical-price RSI variant) are all money-flow tools — different algorithms, different reads; do not mix conclusions.
- Single-day domination: an event's giant CLV × giant volume dominates all subsequent accumulation — short-term A/D shape is distorted by one bar.
A/D in MT5
A/D is a built-in MT5 volume-class indicator (a cumulative sub-window line). The MQL5 function for programmatic use is iAD:
| MQL5 function | iAD() |
| Algorithm | Σ(CLV × Volume), CLV=((C−L)−(H−C))/(H−L) |
| Volume type | VOLUME_TICK / VOLUME_REAL (selectable) |
| Buffers | 0=main buffer (cumulative value) |
| Display window | Sub-window (cumulative curve, no guides) |
iAD takes no period parameter (a running total). applied_volume selects tick or real — forex only has tick volume. In code, remember the anchor arbitrariness: use slope and differences for bull/bear logic, never absolute-value comparisons.
Behavior across timeframes
15-minute
Fine-grained intraday money flow — noisy; watch only the direction of heavy-volume days
1-hour / 4-hour
The main swing period for accumulation/distribution monitoring; divergences usable here
Daily
The classic home: A/D divergences and trendline breaks are most representative on dailies
Weekly
The weekly A/D direction = quarter-scale money flow — a background call for long-term allocation
Indicator combinations
Common pairings for A/D:
- With OBV: both are cumulative money lines with different weighting (range position vs binary close) — agreeing directions make the money-flow call solid. OBV
- With MFI: A/D reads the cumulative flow, MFI reads the extreme state — the ledger-plus-thermometer money combo. MFI
- With RSI: a price-momentum (RSI) and money-flow (A/D) divergence together — the strongest top/bottom form. RSI
FAQ
Q How is A/D different from OBV?
Both are cumulative money lines with different weighting: OBV only compares closes (up books +Vol, down −Vol — 0.1% and 3% identical); A/D weights by where the close lands in the day's range (CLV) — far more sensitive to the intraday fight, Chaikin's improvement over OBV.
Q Do A/D's absolute values mean anything?
No. It is cumulative — the total depends entirely on the starting anchor (and volume units). The only correct reads: direction (rising/falling), slope (accelerating/decelerating) and divergence versus price. Cross-symbol or cross-period value comparisons are meaningless.
Q Why is A/D insensitive to gaps?
Its daily weight depends only on the close's position inside that day's high-low range — the gap between yesterday's close and today's open is not part of the calculation. A bar that gaps up hugely then drifts sideways books ≈0 despite clearly bullish intent — a structural blind spot; gap-heavy instruments should add OBV/CMF.
Q Is A/D reliable on forex?
With reservations. Forex has no central exchange and MT5 volume is tick count — it reflects activity, not real turnover, weakening the "money ledger" semantics. A/D is more reliable on stocks/futures with real volume; on forex, cross-check with price-structure signals.
Q How do I add A/D in MT5?
Menu: Insert → Indicators → Volumes → Accumulation/Distribution, or drag it from the Navigator onto a sub-window. No period parameter; choose tick/real volume — no guides needed; read direction and divergence.
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