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The Advance/Decline Ratio (aka "A/D Ratio") is the number of advancing issues divided by the number of declining issues. This makes it similar to the Advancing/Declining Issues - it shows market breadth (strength). The fact that a division is used, however, makes it independent of the NUMBER of issues in total (which has increased steadily over the years). Often, a moving average of the A/D Ratio is used to indicate an overbought/oversold condition - high values mean a rally is 'overdone' and likely to correct. In the same way, low readings mean an oversold market with a rally on the way. If you think this is therefore a valuable free day trading indicator, you may be wrong, as markets can (to quote) "remain irrational far longer than you can remain solvent". SureFireThing Camarilla Equation (original) users need nothing more than the L3 levels to trade these conditions. Should you wish, you can calculate the A/D Ratio by dividing the number of stocks that advanced in price on the day by the number of stocks that declined on the same day.

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