ADP Trading Guide
The ADP (Accumulation/Distribution Percentage) is a volume-weighted momentum oscillator designed to calculate true buying and selling pressure. It optionally overlays traditional Price RSI and Volume-Weighted RSI to help traders quickly spot accumulation/distribution divergences.
What does the indicator show?
- ADP Line: The primary blue line representing the Accumulation/Distribution Percentage (0-100 scale in Range mode).
- RSI & VW RSI Overlays: Optional purple (True RSI) and orange (Volume-Weighted RSI) lines plotted on the same pane for easy divergence spotting.
- Reference Levels: Key horizontal thresholds plotted at 30 (oversold), 50 (neutral), and 70 (overbought).
Key Settings
- Range Bound %: Calculates the raw ADP into a locked 0-100 oscillator format, enabling direct comparisons with RSIs and fixed overbought/oversold levels.
- A/D Weight (0-1): Tunes how heavily the structural change vs the True Range dictates the ratio.
- Factor Price (Money Flow): When enabled, weight volume by the closing price, transitioning the calculation from pure volume to money flow.
- Show True / VW RSI: Toggles the visibility of the corresponding overlay lines.
How to use Strategy Parameters (Condition Source)
Within the Strategy Tester module, you can leverage the data from this indicator to create powerful logical conditions for trade entries and exits.
1. Threshold Crosses & Divergences
The indicator exposes logic for checking when momentum shifts between bullish and bearish zones, or when volume diverges from price.
ADP vs 50 (Neutral)— A threshold cross event triggering when ADP breaks above or below the 50 centerline.ADP vs True RSI— A highly effective divergence signal; triggers when the A/D line (Volume Momentum) crosses the standard RSI line (Price Momentum).ADP Rising/Falling— A simple directional boolean useful for ensuring you are only trading with the momentum of the volume.
Strategy Example: A high-probability breakout setup might require the ADP to be > 50 AND the ADP vs True RSI crosses_above, proving that volume momentum is currently overtaking pure price momentum.