OPEN-SOURCE SCRIPT
ADL Balance of Power
This script brings together Price (blue), Volume (red) in form of adjusted ADL (including gaps) and every ADL candle is split into Buying Volume ADL (green line) and Selling Volume ADL (magenta).
Fundamentally there are a few cases here:
- ADL action normally precedes price action when it corresponds with buying/selling power positions (higher or lower)
- when money flows out and Selling Volume ADL higher than buying volume ADL then price will be trying to catch down until they meet (price and ADL) or until Selling ADL reverses downwards (e.g. selling power is receding)
- when money flows out and Buying Volume higher than Selling ADL it means price is being pushed up on lower volume
- when money flows in and Buying Volume ADL higher than selling volume ADL then price will be trying to catch up until they meet (price and ADL) or until Buying ADL reverses downwards (e.g. buying power is receding)
- when money flows in and Selling Volume higher than Buying ADL it means price is being pushed down on lower volume
Fundamentally there are a few cases here:
- ADL action normally precedes price action when it corresponds with buying/selling power positions (higher or lower)
- when money flows out and Selling Volume ADL higher than buying volume ADL then price will be trying to catch down until they meet (price and ADL) or until Selling ADL reverses downwards (e.g. selling power is receding)
- when money flows out and Buying Volume higher than Selling ADL it means price is being pushed up on lower volume
- when money flows in and Buying Volume ADL higher than selling volume ADL then price will be trying to catch up until they meet (price and ADL) or until Buying ADL reverses downwards (e.g. buying power is receding)
- when money flows in and Selling Volume higher than Buying ADL it means price is being pushed down on lower volume
Open-source script
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publication is governed by House rules. You can favorite it to use it on a chart.
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