How it is calculated
As TA-Lib's AD (Chaikin): a bar's close location is ((close minus low) minus (high minus close)) divided by (high minus low), from minus 1 at the low to plus 1 at the high. The line adds close location times volume every bar, starting from zero, so it has a value from the first bar. A bar with no range adds nothing.
Reference: TA-Lib AD (Chaikin)
How to read it
As with OBV the level depends on where the data starts; read the slope. A rising line while price goes sideways or falls points to accumulation, a falling one to distribution. Unlike OBV it does not see gaps between bars, since only where the close sits in the bar's own range counts. On forex the volume is tick volume.
In a strategy
As a confirmation: compare ctx.ind("ad") with its value some bars earlier and only follow a breakout when the line rises with it.
Inputs
It takes no inputs.
What it draws
| Line | Drawn as |
|---|---|
| A/D | Line |
Used in
No strategy template reads it yet.