ACCUMULATION DISTRIBUTION LINE

ACCUMULATION DISTRIBUTION LINE: is designed to measure the cumulative flow of money into and out of a security. First, a multiplier is calculated based on the relationship of the close to the high-low range, second, the Money Flow Multiplier is multiplied by the period's volume to come up with a Money Flow Volume. Chartists can use this indicator to affirm a security's underlying trend or anticipate reversals when the indicator diverges from the security price. A bullish divergence forms when price moves to new lows but the Accumulation Distribution Line does not confirm these lows and moves higher; a bearish divergence forms when price moves to new highs but the Accumulation Distribution Line does not confirm and moves lower.