Advance/Decline Ratio

Advance/Decline Ratio

The Advance/Decline Ratio is a breadth-momentum oscillator calculated by first dividing the number of advancing issues by the number of declining issues each day; and then by smoothing the previously derived fraction by using a moving average to tame some of the erratic daily movement. The basic calculation before smoothing is given by the following formula:

R = A/D

where

R: today’s 1-day ratio of advancing issues to declining issues
A: number of advancing issues
D: number of declining issues

Source: Colby, Robert. The Encyclopedia of Technical Market Indicators; (c) 2003.

The following chart is an example of an Advance Decline Line Ratio S&P Volume

 

A_D_Line_Ratio_SP_Volume

 

 

 

 

 

 

 

 

 

 

 

 

Source: Charts created using TradeStation. ©TradeStation Technologies, 2001-2009.  All rights reserved. www.TradeStation.com

The following chart is an example of an Advance Decline Line Ratio S&P Issues

A_D_Line_Ratio_SP_Issues

 

 

 

 

 

 

 

 

 

 

 

 

Source: Charts created using TradeStation. ©TradeStation Technologies, 2001-2009.  All rights reserved. www.TradeStation.com