The A / D indicator is included in the standard set of tools of any self-respecting platform (MT4, TOC, TV), it looks like a simple line on the chart. The formula for calculating this indicator allows you to apply it to any time period for timely measurement of price dynamics.
A / D, like other Chaikin indicators (for example, CMF), was originally used exclusively on the stock exchange, since trading through the exchange allows traders to keep track of the real volumes of cash flows. Later, with the growing popularity of tick volumes (tick volumes are understood as the number of points by which the price changed over a period of time), the Accumulation Distribution indicator migrated to Forex, where it gained no less popularity. Well, today this indicator continues to be used by BO traders who have access to all types of financial assets.Principles and description of the Accumulation Distribution indicator
- To confirm the strength of the trend. If the A / D line moves in the same direction as the chart (that is, it rises on an uptrend or falls on a downtrend), then we are dealing with a strong trend signal for binary options;
- To find divergence (divergence). If we observe that the A / D direction ceases to coincide with the direction of the chart (that is, A / D rises when the chart falls or A / D falls when the chart rises), then we are dealing with divergence - a strong reversal signal for binary options;
- For graphical analysis. On the indicator line, you can build support and resistance levels, channels or any other figures of graphical analysis.