Accumulation Momentum Indicator
Nov 25, 2024
The Accumulation Momentum Indicator tool provides a composite view of market sentiment by aggregating four distinct volume and price-based momentum metrics into a single normalized oscillator.
Usage
The indicator is used to identify shifts in market momentum and the balance between accumulation (buying) and distribution (selling). Traders can interpret the output based on the 50-level midline:
- Values Above 50: Indicates that buying pressure and accumulation are dominant, suggesting a bullish trend or strengthening momentum.
- Values Below 50: Suggests that distribution and selling pressure are dominant, indicating a bearish trend or weakening momentum.
- Crossovers: A crossover above 50 can signal the beginning of a bullish phase, while a crossunder below 50 may signal the onset of a bearish phase.
By adjusting the weights of the individual components, users can emphasize specific market behaviors, such as prioritizing Force Index for magnitude or OBV for trend confirmation.
Details
The script functions by calculating four classic indicators and normalizing their disparate scales to a uniform 0-100 range using a 100-period lookback. These components include:
- Accumulation Distribution (A/D): Measures the cumulative flow of money based on the location of the close relative to the high-low range.
- On Balance Volume (OBV): Relates price change to volume to determine if volume is supporting the current price direction.
- Force Index: Combines price change and volume to measure the power behind market movements.
- Momentum: A simple rate-of-change calculation showing the speed of price acceleration over a 14-period window.
The final output is a weighted average of these four normalized values, providing a smoother, more comprehensive signal than any single component alone.
Settings
- Weight: Accumulation/Distribution (A/D): Determines the influence of the A/D line on the final composite score.
- Weight: On Balance Volume (OBV): Determines the influence of the OBV on the final composite score.
- Weight: Force Index: Determines the influence of the Force Index on the final composite score.
- Weight: Momentum: Determines the influence of the Price Momentum on the final composite score.
- Momentum Length: Sets the lookback period used specifically for the Momentum component (default is 14).
FAQ
How do I access the Accumulation Momentum Indicator?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
Can I disable specific components?
Yes, by setting the weight of any specific component (e.g., Force Index) to 0, that indicator will be excluded from the final calculation.
What do the background colors signify?
The background highlights green when the composite value is above 50 (Accumulation) and red when it is below 50 (Distribution), allowing for quick visual trend identification.
Trading & investing are risky and many will lose money in connection with trading and investing activities. All content on this site is not intended to, and should not be, construed as financial advice. Decisions to buy, sell, hold or trade in securities, commodities and other investments involve risk and are best made based on the advice of qualified financial professionals. Past performance does not guarantee future results.
Hypothetical or Simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, including, but not limited to, lack of liquidity. Simulated trading programs in general are designed with the benefit of hindsight, and are based on historical information. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.
Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.
As a provider of technical analysis tools and strategies, we do not have access to the personal trading accounts or brokerage statements of our customers. As a result, we have no reason to believe our customers perform better or worse than traders as a whole based on any content, tool, or platform feature we provide.
Charts used on this site are by TradingView in which the majority of our technical indicators are built on. TradingView® is a registered trademark of TradingView, Inc. www.TradingView.com TradingView® has no affiliation with the owner, developer, or provider of the Services described herein.
Market data is provided by CBOE, CME Group, BarChart, Massive, CoinAPI. Select U.S. equities data is provided through Massive. CBOE BZX real-time U.S. equities data is licensed from CBOE and provided through BarChart. Real-time futures data is licensed from CME Group and provided through BarChart. Select cryptocurrency data, including major coins, is provided through CoinAPI. All data is provided “as is” and should be verified independently for trading purposes.
This does not represent our full Disclaimer. Please read our full disclaimer.
© 2026 LuxAlgo Global, LLC.