Home > Technical analysis > Technical indicators > Accumulation/distribution of volume (Volume Accumulation VA)

Accumulation/distribution of volume (Volume Accumulation VA)

Chaikin's indicator of accumulation/distribution worked out by M. Chaikin and D. Lambert is another version of the On Balance Volume - (OBV). There are not many parameters defining the volume accumulation-distribution. Therefore it's not that important to test the effectiveness of each indicator's value. This indicator's mechanism of work is based on two underwritten notions.

Firstly, at stable trend, volumes of tenders, as a rule, are higher than an average level. This concept suggests that at bull trend VA will go up too, and its values will be positive, and at descending bear trend VA will go down and receive negative values.

Secondly, as a rule, the closing prices are quite near their extreme values. That's why at bull trend, the closing is nearer to a ceiling price, and at bear trend the closing price is nearer to a floor price.