Advance/Decline Line (A/D Line)
The Advance/Decline Line (A/D Line) is a technical indicator used in stock market analysis to measure the number of advancing stocks versus the number of declining stocks. It is calculated by subtracting the number of declining stocks from the number of advancing stocks and plotting the result on a chart. The A/D Line is used to identify potential market trends and to confirm existing trends. It is also used to identify divergences between the A/D Line and the price of the underlying security, which can be used to identify potential reversals in the market.
History of the A/D Line
The A/D Line was developed by the American stock market analyst Richard W. Arms Jr. in the late 1950s. Arms was a pioneer in the field of technical analysis and developed the A/D Line as a way to measure the strength of the market. The A/D Line is still widely used today by technical analysts to identify potential market trends and to confirm existing trends.
Comparison Table
Indicator | Description |
---|---|
Advance/Decline Line (A/D Line) | Measures the number of advancing stocks versus the number of declining stocks. |
Summary
The Advance/Decline Line (A/D Line) is a technical indicator used in stock market analysis to measure the number of advancing stocks versus the number of declining stocks. It is calculated by subtracting the number of declining stocks from the number of advancing stocks and plotting the result on a chart. The A/D Line is used to identify potential market trends and to confirm existing trends. For more information about the A/D Line, you can visit websites such as Investopedia, StockCharts, and TradingView.
See Also
- Relative Strength Index (RSI)
- Moving Average Convergence Divergence (MACD)
- On-Balance Volume (OBV)
- Price Volume Trend (PVT)
- Accumulation/Distribution Line (A/D Line)
- Money Flow Index (MFI)
- Average Directional Index (ADX)
- Stochastic Oscillator
- Bollinger Bands
- Commodity Channel Index (CCI)