What is the Advance/Decline Line?
The advance/decline line is a simple process that is used to measure the performance of a given market within a specified period of time. In order to properly formulate the advance decline line, it is necessary to establish the time frame that will be utilized for the calculation. Generally, the time frame will involve at least one complete trading day, although longer periods may be used. When it comes to the actual calculation of the advance/decline line, the process is very simple. First, the amount of stocks that rose during the period is determined. Next, the amount of stocks that suffered a decline is also identified. Any stocks that remained constant are usually counted as being in decline. Once the two figures are identified, the amount of stocks that rose is divided by the amount of stock that declined. The result of the calculation will determine if the trading period indicates a bullish market or a bearish one. Determining the nature of the market trading day is easy. If the
