Acceleration/Deceleration

Developed by Bill Williams

Acceleration/Deceleration measures acceleration & deceleration of the trend momentum - it is popularly used to analyze both stock markets and stock indices market movements.

This indicator changes direction before the stock indices trading price changes its direction.

The Acceleration/Deceleration is used to generate early trading signals of trend reversals.

If AC changes direction then stock indices trading price direction will soon follow.

Indices Technical Analysis and How to Generate Trading Signals

The Zeroline is the spot where the momentum is at balance with acceleration or deceleration.

If Acceleration/Deceleration is higher than Zero, then it is easier for the acceleration to continue in the upwards movement.

If Acceleration/Deceleration is lower than Zero, then it is easier for the deceleration to continue in the downwards 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 color of the AC changes from red to green.

Buy 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 can't buy.

When the indicator is higher than Zero & the current bar is green a buy stock indices trade signal is generated.

When the AC is lower than zero & the current bar is green a confirmation signal is required for a buy. 3 green bars is usually another confirmation.

Sell Trading Signal

When the current column changes from green to red this is analyzed as a sell.

When the current column is colored green, you can't sell.

When the indicator is lower than Zero & the current bar is red is a sell stock indices trade signal is generated.

When the AC is higher than zero & the current bar is red a confirmation signal is required for a sell. 3 green bars is usually another confirmation.

Technical Analysis in Indices Trading