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Accumulation/Distribution Oscillator
# Short description
A clean, volume-weighted Accumulation/Distribution Oscillator (ADO) that highlights buying/selling pressure by comparing cumulative AD to its EMA — ideal for confirming trends, spotting divergences, and timing entries with volume context.
# Full description
**Overview**
The Accumulation/Distribution Oscillator (ADO) measures the relationship between price and volume by taking a cumulative Accumulation/Distribution value and subtracting its exponential moving average. The resulting oscillator emphasizes recent shifts in accumulation (buying) and distribution (selling), making it easier to spot momentum changes and volume-driven confirmations or divergences.
**How it works (brief)**
* Computes the standard accumulation/distribution contribution each bar using price position within the range and multiplies it by volume.
* Builds a cumulative AD series and smooths it with an EMA.
* The oscillator = cumulative AD − EMA(cumulative AD). Positive values indicate rising accumulation relative to the trend, negative values indicate rising distribution.
**Inputs**
* `length` — EMA smoothing period (default: 20). Adjust to tune sensitivity: lower values = faster signals, higher values = smoother trend.
**Interpretation & signals**
* **Above zero**: recent accumulation momentum — bullish bias.
* **Below zero**: recent distribution momentum — bearish bias.
* **Crosses of zero**: simple entry/exit trigger (cross above = potential long, cross below = potential short).
* **Divergences**: price making new highs while ADO fails to make new highs → bearish divergence (sell signal). Price making new lows while ADO fails to make new lows → bullish divergence (buy signal).
* **Slope and magnitude**: steep, growing positive readings suggest strong buying pressure; steep, growing negative readings suggest strong selling pressure.
**Suggested usage**
* Use ADO to confirm breakout strength: a price breakout with ADO rising above zero has higher probability.
* Combine with trend filters (e.g., moving averages) to trade in the direction of the main trend.
* Use divergence with price action or candles for higher-probability reversal setups.
* Best applied on intraday and swing timeframes where volume data is reliable. May be less effective on low-volume or synthetic data.
**Alert examples (copy into TradingView alert message)**
* `ADO Bullish: Oscillator crossed above 0`
* `ADO Bearish: Oscillator crossed below 0`
* `ADO Momentum Up: Oscillator turned positive and rising`
* `ADO Divergence: Price made new high but ADO did not — check for potential reversal`
**Practical tips**
* Shorten `length` (e.g., 8–12) for more responsive signals on lower timeframes; lengthen (e.g., 30–50) for smoother, long-term signals.
* Confirm signals with volume profile or volume spike filters to avoid false breakouts.
* Always validate with support/resistance and manage risk with stops sized to your strategy.
**Disclaimer**
This indicator is a technical tool intended to assist analysis — not a standalone trading system. Backtest and paper-trade any strategy before using real capital. The author and publisher are not responsible for trading outcomes.
A clean, volume-weighted Accumulation/Distribution Oscillator (ADO) that highlights buying/selling pressure by comparing cumulative AD to its EMA — ideal for confirming trends, spotting divergences, and timing entries with volume context.
# Full description
**Overview**
The Accumulation/Distribution Oscillator (ADO) measures the relationship between price and volume by taking a cumulative Accumulation/Distribution value and subtracting its exponential moving average. The resulting oscillator emphasizes recent shifts in accumulation (buying) and distribution (selling), making it easier to spot momentum changes and volume-driven confirmations or divergences.
**How it works (brief)**
* Computes the standard accumulation/distribution contribution each bar using price position within the range and multiplies it by volume.
* Builds a cumulative AD series and smooths it with an EMA.
* The oscillator = cumulative AD − EMA(cumulative AD). Positive values indicate rising accumulation relative to the trend, negative values indicate rising distribution.
**Inputs**
* `length` — EMA smoothing period (default: 20). Adjust to tune sensitivity: lower values = faster signals, higher values = smoother trend.
**Interpretation & signals**
* **Above zero**: recent accumulation momentum — bullish bias.
* **Below zero**: recent distribution momentum — bearish bias.
* **Crosses of zero**: simple entry/exit trigger (cross above = potential long, cross below = potential short).
* **Divergences**: price making new highs while ADO fails to make new highs → bearish divergence (sell signal). Price making new lows while ADO fails to make new lows → bullish divergence (buy signal).
* **Slope and magnitude**: steep, growing positive readings suggest strong buying pressure; steep, growing negative readings suggest strong selling pressure.
**Suggested usage**
* Use ADO to confirm breakout strength: a price breakout with ADO rising above zero has higher probability.
* Combine with trend filters (e.g., moving averages) to trade in the direction of the main trend.
* Use divergence with price action or candles for higher-probability reversal setups.
* Best applied on intraday and swing timeframes where volume data is reliable. May be less effective on low-volume or synthetic data.
**Alert examples (copy into TradingView alert message)**
* `ADO Bullish: Oscillator crossed above 0`
* `ADO Bearish: Oscillator crossed below 0`
* `ADO Momentum Up: Oscillator turned positive and rising`
* `ADO Divergence: Price made new high but ADO did not — check for potential reversal`
**Practical tips**
* Shorten `length` (e.g., 8–12) for more responsive signals on lower timeframes; lengthen (e.g., 30–50) for smoother, long-term signals.
* Confirm signals with volume profile or volume spike filters to avoid false breakouts.
* Always validate with support/resistance and manage risk with stops sized to your strategy.
**Disclaimer**
This indicator is a technical tool intended to assist analysis — not a standalone trading system. Backtest and paper-trade any strategy before using real capital. The author and publisher are not responsible for trading outcomes.
Script protetto
Questo script è pubblicato come codice protetto. Tuttavia, è possibile utilizzarle liberamente e senza alcuna limitazione – ulteriori informazioni qui.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.
Script protetto
Questo script è pubblicato come codice protetto. Tuttavia, è possibile utilizzarle liberamente e senza alcuna limitazione – ulteriori informazioni qui.
Declinazione di responsabilità
Le informazioni e le pubblicazioni non sono intese come, e non costituiscono, consulenza o raccomandazioni finanziarie, di investimento, di trading o di altro tipo fornite o approvate da TradingView. Per ulteriori informazioni, consultare i Termini di utilizzo.