Accumulation is a term used to describe a market controlled by buyers; whereas distribution is defined by a market controlled by sellers.

Interpretation

Williams recommends trading this indicator based on divergences:

• Distribution of the security is indicated when the security is making a new high and the A/D indicator is failing to make a new high. Sell.

• Accumulation of the security is indicated when the security is making a new low and the A/D indicator is failing to make a new low. Buy.