Chaikin A/D Oscillator
fast_period = 3 (2–50) • slow_period = 10 (5–200) Overview
The Chaikin A/D Oscillator, created by Marc Chaikin, is a momentum indicator that measures the accumulation-distribution line of moving average convergence-divergence (MACD). It applies the MACD methodology to the Accumulation/Distribution Line rather than to price, specifically calculating the difference between the 3-day and 10-day EMAs of the A/D Line.
This oscillator is designed to anticipate directional changes in the Accumulation Distribution Line by measuring the momentum behind the movements. It helps traders identify when buying or selling pressure is accelerating or decelerating, often flagging short-term reversals in price before they occur.
Interpretation & Trading Signals
Zero Line Crossovers:
- Buy Signal: Oscillator crosses above zero - indicates increasing buying pressure and accumulation momentum
- Sell Signal: Oscillator crosses below zero - indicates increasing selling pressure and distribution momentum
- Confirmation: Wait for upturn in indicator or cross into positive territory before acting on signals
Divergence Signals:
- Bullish Divergence: Price makes new low but oscillator makes higher low - signals potential upward reversal
- Bearish Divergence: Price makes new high but oscillator makes lower high - signals potential downward reversal
- Most Frequent Signal: Divergence is the indicator's primary signal and often flags short-term reversals
Trend Interpretation:
- Bullish Market: Oscillator consistently above zero line confirms bullish sentiment
- Bearish Market: Oscillator consistently below zero line suggests bearish sentiment
- Customization: Using 6 and 20-day EMAs creates less sensitive oscillator for longer-term analysis
- Primary Purpose: Confirm price trends and warn of impending reversals
Example Usage
Code examples will be available once the Rust implementation is complete.