Description

• Founded by Larry William, it measures the market pressure on the stock.
• It considers true range and volumes of the stock to help understand accumulation and distribution.

Interpretation

• It is traded on divergence with the actual price movement.
• If stock is making upside movement or new high will WAD fails to support it, there is a negative divergence and it is a short signal.
• If stock is making lows and WAD is not falling, it is a indication of a bullish divergence and a long signal.

Default Parameters Used/Inputs

• High Line
• Low Line
• Close Line

Returns/Output

WAD values of stock for the each candle.

Formula

WAD = AD + WAD-1
Where,
If close > close-1, then
AD = (close – min(low, close-1)) * volume
If close < close-1, then
AD = (max(High, close-1) - close)) * volume
If close = close-1, then
AD = 0