Mean Accumulation/Distribution (Mean A/D)

Overview

The Mean Accumulation/Distribution indicator represents an innovative refinement of Marc Chaikin's original A/D line, introducing moving average smoothing to create a more stable and reliable measure of money flow. By calculating the average of A/D values over a specified period, this variant effectively filters out the erratic movements that can plague the standard indicator, particularly in volatile markets. The Mean A/D maintains the core principle that volume precedes price movement while adding a layer of statistical smoothing that reveals the underlying trend in accumulation or distribution patterns. This averaging process transforms the sometimes jagged A/D line into a smoother curve that's easier to interpret and less prone to whipsaws.

The practical advantage of the Mean A/D lies in its ability to distinguish between genuine accumulation/distribution phases and temporary market noise. While the standard A/D line might spike or dip dramatically on individual high-volume days, the Mean A/D smooths these fluctuations to show whether sustained buying or selling pressure truly exists. This characteristic makes it particularly valuable for position traders and investors who need to identify longer-term trends in institutional activity. The indicator excels at confirming trend strength - when price and Mean A/D move in harmony, it suggests strong participation and trend sustainability. Conversely, divergences between price action and the Mean A/D often provide early warning of potential reversals, as they indicate that the apparent price trend lacks the volume support necessary for continuation.

Interpretation & Trading Signals

Example Usage

Code examples will be available once the Rust implementation is complete.