Glossary / Disclosure & flow

Accumulation / distribution

Also called: accumulation · distribution · A/D line

Accumulation describes building a position gradually over many sessions to avoid moving the price; distribution describes unwinding one the same way. The terms also name a family of volume-weighted indicators that attempt to infer which is happening from price and volume data alone.

How it is measured

How is accumulation / distribution measured?

The classic indicator weights each session's volume by where the close landed inside that session's high-to-low range, then accumulates the result into a running line. A close near the session high assigns most of the volume positively; a close near the low assigns it negatively. Variants substitute different weightings, but all of them infer intent from price location rather than observing it.

Why it matters

Why does accumulation / distribution matter to a swing trader?

The underlying behaviour is real and is why large positions are worked over days rather than executed at once. The measurement is the weak part, and this is the honest framing: because every trade has a buyer and a seller, no indicator built from public price and volume data can identify who was accumulating. These studies produce an inference, not an observation. Filed disclosures like Form 4 are the only sources that report actual transactions by identified parties.

Related

See this in the product

Disclosed insider transactions · Full methodology

Related terms

Volume
Volume is the number of shares that changed hands over a period.
SEC Form 4
Form 4 is the filing corporate insiders submit to the SEC to report transactions in their own company's securities.
Relative volume
Relative volume compares the volume traded in a session to that same security's own average volume over a recent window, expressed as a multiple.
Float
Float is the number of a company's shares that are actually available to trade in the open market.

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General information about market vocabulary, written to be descriptive rather than prescriptive. Not investment advice — see the risk disclosure.