Free Download the Accumulation & Distribution By Larry Williams – Includes Verified Content:
Williams’ Accumulation/Distribution (WAD) Indicator: A Guide to Measuring Market Pressure
Developed by renowned technical analyst Larry Williams, the Williams’ Accumulation/Distribution (WAD) indicator is a momentum-based tool designed to identify buying and selling pressures in the market—without relying on volume data. Unlike other accumulation/distribution indicators like On-Balance Volume (OBV) or the Chaikin Oscillator, WAD strictly uses price action to detect accumulation (buying pressure) or distribution (selling pressure), making it a unique and valuable indicator for price-based analysis.
What You’ll Learn:
📈 Understanding the WAD Formula
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How to calculate True Range High (TRH) and True Range Low (TRL):
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TRH = Maximum of today’s high or yesterday’s close
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TRL = Minimum of today’s low or yesterday’s close
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How to calculate WAD values based on price change from the previous close
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How cumulative WAD is constructed over time
🔍 Interpreting Divergences for Trading Signals
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Sell Signal: When price forms a new high but WAD fails to confirm with a higher high (bearish divergence)
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Buy Signal: When price sets a new low while WAD does not confirm with a new low (bullish divergence)
✅ Signal Confirmation Techniques
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How to draw trendlines on the WAD indicator for confirmation
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Identifying breakout points on the WAD trendline to support trade entry decisions
Case Study: Wal-Mart Stores, Inc. (WMT)
Using a daily price chart of WMT:
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A sell signal is triggered where price hits a new high but WAD diverges. Confirmation occurs when the WAD trendline breaks down.
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A buy signal appears when price hits a new low while WAD does not. The break above the WAD trendline confirms bullish momentum.
Key Takeaways:
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WAD is ideal for traders who prefer price-based momentum indicators over volume-based ones.
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Divergence between price and WAD reveals early signals of potential trend reversals.
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When used in combination with trendline analysis, WAD becomes a powerful tool for timing entries and exits.
This module is essential for traders looking to enhance their understanding of non-volume-based momentum analysis and improve their ability to identify high-confidence reversal setups.
