Williams Accumulation Distribution

The Williams Accumulation Distribution (or W-A/D) indicator created by Larry Williams seeks to measure market pressure.

Calculation Method

W-A/D = Cumulative(Volume * K)

where term K is, depending on the case:

• If today's closing price is higher than yesterday's: K = Today's closing price - "True Range Low"
• If today's closing price is lower than yesterday's: K = Today's closing price - "True Range High"
• If today's closing price is the same as yesterday's: K = 0

with the understanding that:

• "True Range Low": Maximum of yesterday's closing price and today's low
• "True Range High": Maximum of yesterday's closing price and today's high

Example

Interpretation

Williams recommends using this indicator when it diverges from prices:

• Sell if the price reaches a new high and the W-A/D fails to reach a new high.
• Buy if the price reaches a new low and the W-A/D fails to reach a new low.