what is ADVANCE,DECLINE ratio. also explain how it helps
the investor to predict the stock market movements?
Answers were Sorted based on User's Feedback
Answer / rajesh dubey
Advance Decline ratio is the proportion of stocks trading
above their previous close to the stocks trading below
their previous close. This can be used as a sentiment of
investors during any trading session.
| Is This Answer Correct ? | 4 Yes | 1 No |
Answer / hinal
The advance decline ratio( A/D ratio) is one of the
technical indicators which illustrate the ratio of
advancing issues to declining issues. It is calculated by
dividing the no of stocks that advanced in price for the
day by the no of stocks that declined. The A/D ratio
remains constant regardless of the no of issues that are
traded in the Stock Exchange.
| Is This Answer Correct ? | 4 Yes | 3 No |
Answer / rajesh kumar
Advance/Decline Ratio
Another variation on the A/D line is the advance/decline
ratio, which divides the advancers by the decliners. Here is
the formula:
A/D Ratio = # of Advancing Stocks / # of Declining Stocks
This formula creates values that cannot be less than zero
because it is a fraction (or ratio). A value of 3 means that
three times as many stocks advanced as declined. Any value
less than 1 means more stocks declined than advanced.
Because of the nature of fractions, the chart is more
legible using a logarithmic scale. Like the A/D spread, this
chart moves quickly, so it's usually smoothed with a moving
average.
| Is This Answer Correct ? | 1 Yes | 0 No |
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