A line measuring advances and declines that reflects market breadth. In its simplest form, the AD-Line is a summation over time of the net daily difference between the number of advancing issues and the number of declining issues. AmiBroker uses a slightly improved formula which also takes into account the number of unchanged issues. The exact AFL formula for AmiBroker's AD-Line is:
Difference = ( AdvIssues() - DecIssues() )/ ( UncIssues()
+ 1 );
DiffSqrt = IIF( Difference > 0, sqrt( Difference ), - sqrt( - Difference
) );
ADLine = Cum( DiffSqrt );
This is a classical indicator which tends to give a good reading of the overall strength of the market. A break in the A/D line usually precedes a break in prices. Look for non-confirmation and divergence.
See also AFL Function reference: AFL Function: adline()