# Accumulation/Distribution Indicator - Line, How to Use, Strategy, & Formula

## What is Accumulation Distribution Line (ADL) – It’s All About The Volume

The accumulation distribution line (ADL) was developed by Marc Chaikin. It was then referred to as the Cumulative Money Flow Line. Whatever you may call it, the ADL attempts to calculate the inflow and outflow of money by assuming that the green candle’s volume is the accumulation and a red candle’s (bear candle) volume is distribution. These points are then plotted to create an upward line denoting accumulation and a downward-moving line denoting distribution.

## Calculating the Accumulation/Distribution Line

The Accumulation/Distribution Line (ADL) can be calculated using three steps. First, calculate the Money Flow Multiplier. Second, multiply this value by volume to find the Money Flow Volume. The ADL Indicator is then created through the third step by running the total Money Flow Volume.

1. Money Flow Multiplier = [(Close – Low) – (High – Close)] /(High – Low)

2. Money Flow Volume = Money Flow Multiplier x Volume for the Period