Blockchain and Cryptocurrency Advanced - The Process of How to Place the A/D Indicator

For this demonstration, I will be making use of the tradingview platform to show how to add the A/D indicator on a chart.

To do this, we have to visit the tradingview website at https://www.tradingview.com. Click on the indicator icon which is at the top

On the indicator search, type in the name of the indicator to search for it in the library. I typed in AD on the search. Click on the the Accumulation Distribution to add the indicator on the chart

In the Accumulation/Distribution indicator area, click on the settings icon

There are three main sections on the A/D indicator settings; input section, styles section and visibility section.

Input - The A/D indicator doesn't have any inputs, however, the timeframe can be changed. By default, it is set to sane as chart.

Styles - The styles settings allows the colour and line thickness of the A/D oscillator line to be changed based on preference.

Visibility - The visibility allows the different elements to be toggled on or off depending on the technical analsys needs.

formula of the A/D Indicator

A/D Indicator Calculation

When it comes to A/D Indicator Calculation, two parameters are taken into consideration; the money flow multiplier and the money flow volume. The money flow multiplier basically focuses on the close price, high price and low price.

To calculate the Money Flow Multiplier (MFM)

MFM = (CP – LP) – (HP – CP) / (HP – LP)

Where;

Closing price = CP
Highest price = HP
Lowest price = LP

To calculate the Money Flow Volume (MFV)

= (MFM) x (PV)

Where;

Money Flow Multiplier = MFM
Period Volume = PV

Accumulation/Distribution = (P A/D) + (CPMFV)

Where;
Previous A/D = P A/D
Current Period Money Flow Volume = CPMFV

Let’s take for instance, AAVE/USDT
Close price = $307
Lowest price = $270
Highest price $324
Volume $7,889,000.

MFM = (307 - 270) - (324 - 307) / (324 – 270)
MFM = (37) - (17) / (54)
= 20 / 54
= 0.37
MFM = 0.37

MFV = (MFM) x Period Volume
MFV = 0.37 x $7,889,000
MFV = $2,918,930

Therefore,
The Accumulation/Distribution = $7,889,000 + $2,918,930
= 10,807,930
A/D = $10,807,930