Accumulation is a market controlled by buyers, distribution is a market controlled by sellers. The Williams Accumulation/Distribution indicator is usually traded on divergences as follows:- Distribution is suggested by the stock making new highs and yet the A/D indicator is failing to make a new high, so you therefore sell. Accumulation is suggested by the stock making new lows and yet the A/D indicator is failing to make a new low, so you buy. Day trading with this indicator is impossible due to the timescale needed to acquire the data (daily). There is no evidence that the indicator works on any shorter timeframe.

To calculate Williams' Accumulation/Distribution indicator, first work out the True Range High ("TRH" - the higher of yesterday's close or todays high) and True Range Low ("TRL" - the lower of yesterdays close or todays low).

Next, if todays close is greater than yesterdays close, todays A/D is todays close - TRL. If today's close is less than yesterday's close, todays A/D is todays close - TRH. If today's close is equal to yesterday's close, todays A/D is zero.

The Williams' Accumulation/Distribution indicator is then simply a running total of these daily values, i.e. Williams Accumulation/Distribution = todays Williams Accumulation/Distribution + yesterdays Williams Accumulation/Distribution.

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