New edge proposed: accumulation_distribution_volume_saturation — E8 Intelligence Research

Abstract

{ "name": "accumulation_distribution_volume_saturation", "source": "Larry Williams / Tom Williams' VSA methodology", "type": "filter_flag", "rule": "Only take the trade if the current bar's cumulative accumulation-distribution line (ADL) is below its 20-period exponential moving average AND the bar's volume is in the top 20% of the last 100 bars' volume range, indicating professional distribution saturation after an uptrend.", "pseudocode": "if close_price > open_price then current_ad = volume; else current_ad = -volume; ADL = cumsum(current_ad); if length(ADL) >= 20 then ema20 = ta.ema(ADL, 20); high_volume = volume > ta.percentile(volume, 80, 100); filter = (ADL < ema20) and high_volume; else filter = false;", "why_it_works": "This captures moments when large participants are actively distributing into rising prices (divergence between price uptrend and weakening ADL) with abnormally high volume revealing climax distribution." } Author: Andrew Stewart Caldin, Independent Researcher, UK. Part of the E8 Intelligence Research series. Platform: e8intelligence.com