Williams Accumulate Distribute
Steven Achelis, in his book Technical Analysis A-Z, omits volume from the Williams Accumulation Distribution formula and several other websites/ software programs appear to follow this approach. For the benefit of investors accustomed to Achelis’ approach, we have provided both indicators.
Williams Accumulate Distribute, Achelis' version, is not a volume indicator despite the name. It is a cumulative measure of trading range for each period.
Williams Accumulate Distribute is traded on divergences. When price makes a new high and the indicator fails to exceed its previous high, distribution is taking place. When price makes a new low and the WAD fails to make a new low, accumulation is occurring.
The original indicator was created by Larry Williams.
Go long when there is a bullish divergence between Williams Accumulate Distribute and price.
Go short on a bearish divergence.
Intel Corporation is plotted with Williams Accumulate Distribute.
Mouse over chart captions to display trading signals.
- Go long [L] on bullish divergence.
- Go short [S] on bearish divergence.
- The divergence is soon followed by a triple divergence where price makes a higher High and the indicator makes a new Low.