Investing & Trading

Accumulation/Distribution Pressure Volume Study

By Samantha Baltodano


TL;DR:

The Accumulation/Distribution Pressure Volume study uses the price and volume of a security to assess the trend strength and identify points of divergence. These points of divergence indicate trend weakness and possible reversal.


What Is Accumulation/Distribution Pressure Volume Study?

The Accumulation/Distribution Pressure Volume study is used to assess the strength of a trend by finding divergences between the price plot and the indicator itself. 


It is calculated using the following method:


  • Open price is subtracted from the Close price;
  • The difference is divided by price range (Range = High price - Low price);
  • The ratio is multiplied by volume;
  • The final result is equal to the cumulative sum of the values found.


The divergence between the price plot and the indicator might indicate trend weakness and subsequent reversal.

Accumulation/Distribution Pressure Volume  is just one of many studies that Archaide automates. For a full list of strategies and studies available click here.


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