Developed by Bill Williams
Acceleration/Deceleration measures acceleration and deceleration of the indices trend momentum - it is popularly used to analyze both stock markets and stock indices market movements.
This indicator changes direction before the stock indexes price changes its direction.
The Acceleration/Deceleration is used to generate early signals of indices trend reversals.
If AC changes direction then stock indexes price direction will soon follow.
Indices Technical Analysis and Generating Indices Trading Signals
The Zero line is the spot where the momentum is at balance with the acceleration or deceleration.
If Acceleration/Deceleration is higher than Zero, then it is easier for the acceleration to continue in the upward movement.
If Acceleration/Deceleration is lower than Zero, then it is easier for the deceleration to continue in the downward movement.
The Zero point is not regarded as a buy or sell stock indices signal when it is crossed.
a buy or sell indices trade is generated when the color of the AC changes from red to green.
Buy Indices Trading Signal
When the current column changes from red to green this is interpreted as a buy.
When the current column is colored red, you cannot buy.
When the indicator is higher than Zero and the current bar is green a buy stock indices signal is generated.
When the AC is lower than zero and the current bar is green a confirmation signal is required for a buy. 3 green bars is usually another confirmation.
Sell Indices Trading Signal
When the current column changes from green to red this is interpreted as a sell.
When the current column is colored green, you cannot sell.
When the indicator is lower than Zero and the current bar is red is a sell stock indices signal is generated.
When the AC is higher than zero and the current bar is red a confirmation signal is required for a sell. 3 green bars is usually another confirmation.