Accumulation/distribution line

The accumulation/distribution line, associated with Larry Williams and Marc Chaikin, adds volume signed by where the close sits in the bar's range. A close near the high contributes the full volume as accumulation. A close near the low contributes it as distribution. Traders compare the line's swings with price swings. Divergence is the warning, not a price target.

Not investment advice. Nothing here is a recommendation to buy or sell anything. Backtests and historical studies are not guarantees, and a rule that worked in one sample can fail in the next. Trading can lose money. Links are for education, not endorsements. Do your own research.

Rules

Compute the close-location value from -1 to +1 and multiply by volume. Cumulate it. Prefer longs while the line confirms higher highs in price. If price makes a higher high and the line makes a lower high, tighten the stop or skip the add. Define the swing with a mechanical pivot rule. Do not short every divergence in a bull market.

Where AI fits

AI can code the close-location value and a pivot definition so divergence is countable. It can ignore bars with missing volume. It should not treat the cumulative level as comparable across stocks. The line's slope over a fixed window is a cleaner feature than a hand-drawn divergence.

Markets

Stocks and ETFs. Futures volume must be from one consistent source.

Timeframes

Daily.

Risks

Closing auctions dominate the close location. The cumulative line is warped by one giant day. Divergence can persist. The Chaikin oscillator is a smoothed cousin of this line, so it is not a second opinion. Bad volume data makes a confident-looking curve.

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