Intraday Intensity Index

Posted in Finance, Accounting and Economics Terms, Total Reads: 827
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Definition: Intraday Intensity Index

A technical indicator which tries to approximate the volume traded of a particular security in a day.


The calculation is done using the given formula:

Vol. = (2*close-high-low)/[(high-low)*volume]

 

Explanation

This indicator is called as A/D, accumulation distribution, by some authors. As already discussed this is an approximate of total trade which has been happened in a day. The above formula is derived from the formula of A/D used by Metastock and tradestation as:


A/D=cum((((close-low) - (high-close)) / (high-low)) * volume)


The reason why this indicator is used is to check the activity in the market. To check the popularity of stock or just to check if a particular news or incident has had any impact on the price of the stock.

 

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