An indicator that keeps a running total of each candle’s volume, weighted by where the close ended between the day’s high and low, to show buying pressure (accumulation) and selling pressure (distribution).
- Weapon tier
- Standard
- Slots used
- Sub-charts 1/2
- Created by
- Marc Chaikin
Concept
One line is drawn in a lower panel. When the close ends near the day’s high, most of that candle’s volume is added; when it ends near the low, most of it is subtracted. The line is that total, built up candle after candle.
The number itself means nothing; you read the slope. If the price stays put while the line rises, it is read as “closes keep ending near the top — someone is buying up shares”.
- AD Line
Charts by TradingView Lightweight Charts™
80 candles with volume, and the AD Line in a lower panel. From candle 30 to candle 60 (shaded), the price moves up and down in a narrow range, but the AD Line climbs almost without a break. The yellow vertical line (candle 60) is the end of that stretch, and some time later the price moves up. Keyboard: ←/→ to move, +/− to zoom, 0 to see the whole chart.
During the shaded stretch the price barely moved, yet the line climbed steadily. This chart was picked because the price rose afterwards. It is common for the line to rise first and the price never to follow. Drag the chart sideways with a finger or the mouse to move it, and pinch with two fingers to zoom in. With a keyboard, click the chart, then use ←/→ to move and +/− to zoom.
How it is calculated
For each candle, take the location value = ((close − low) − (high − close)) ÷ (high − low). A close at the high gives +1, at the low −1, right in the middle 0. If the high equals the low, it is 0.
Multiply that value by the candle’s volume.
AD Line = the previous candle’s AD Line + this candle’s value. It is a running total from the start.
Parameters
There are no parameters to change. In the game’s weapon screen it is equipped without options.
Trading ideas
Spotting accumulation: when the price moves sideways while the AD Line climbs steadily, it is read as someone buying up shares. The chart on this page shows that scene. The other way round, a price holding while the line falls is read as someone selling out.
Confirmation: when the price makes a new high and the line does too, the rise is seen as solid; when only the price rises, traders become suspicious.
Common traps
- It ignores the gap from the previous close. A day that opens much lower and closes near its high lifts the line even though the price fell.
- A single day with a burst of volume moves the line a lot. Look for a steady slope.
- None of these are sure signals. Read them together with the price trend (lesson 2).
In the game
- “AD Line” is a “Standard” weapon and uses 1 of the “Sub-charts” panels (limit 2). Volume in the starting setup already uses 1, so adding it brings it to 2 (0 left).
- It has no settings to change, so you equip it as it is on the “Weapons” screen too.
- A running total depends on where the counting started, so do not compare its numbers between matches or stocks. Only read its slope within the same chart.
Related indicators and lessons
- Volume Profile — An indicator that shows with horizontal bars which price levels saw the most trading, to find “the prices where many people bought and sold”.
- OBV — An indicator that keeps a running total, adding the volume of up days and subtracting the volume of down days, to show whether trading leaned toward buyers or sellers.
- MFI — An indicator that multiplies price moves by volume to show, from 0 to 100, whether more money has recently flowed in on the buying side or the selling side.
- Volume Oscillator — An indicator that shows how many % the short-term average volume is above (or below) the long-term average, telling you whether trading is heating up or cooling down.
- Volume Ratio — An indicator that shows the volume of recent up days as a % of the volume of down days, telling you whether trading leaned toward buyers or sellers.
- EOM — An indicator of “how easily the price moves”, showing whether the price rises (or falls) easily even on light volume.
- PVT — An indicator that keeps a running total of “% move × volume” for each candle, showing whether volume pushed more on the rising side or the falling side.
- CMF — An indicator that weighs, by volume, whether closes over the last 20 candles mostly ended near the top or the bottom of each day, shown between −1 and +1.
- VWAP — An average-price line that gives more weight to prices from high-volume candles, showing roughly what people paid on average recently.
- Force Index — An indicator that multiplies how far the price moved by volume, showing whether the “force” was behind the rising side or the falling side.
- 1. Reading a single candle
- 4. Volume and volume MA