Define: Advance Decline Ratio

Advance Decline Ratio
Advance Decline Ratio
What is the dictionary definition of Advance Decline Ratio?
Dictionary Definition of Advance Decline Ratio

Advance Decline Ratio is a financial indicator that measures the number of advancing stocks versus the number of declining stocks in a given market or index. It is calculated by dividing the number of advancing stocks by the number of declining stocks. This ratio is commonly used by traders and investors to gauge the overall market sentiment and strength. A ratio greater than 1 indicates a bullish market, as there are more advancing stocks than declining stocks, while a ratio less than 1 suggests a bearish market, with more declining stocks than advancing stocks. The Advance Decline Ratio is a useful tool for analyzing market breadth and can provide insights into the overall health and direction of the market.

Full Definition Of Advance Decline Ratio

The Advance Decline Ratio is a financial indicator used to measure the overall health and direction of a stock market or specific index. It is calculated by dividing the number of advancing stocks by the number of declining stocks on a given trading day.

This ratio is commonly used by investors and traders to assess market sentiment and determine whether the market is bullish or bearish. A ratio greater than 1 indicates that there are more advancing stocks than declining stocks, suggesting a positive market sentiment and potential upward trend. Conversely, a ratio less than 1 indicates a negative sentiment and potential downward trend.

The Advance Decline Ratio is often used in conjunction with other technical analysis tools to confirm market trends and make informed investment decisions. It is important to note that this ratio is not a standalone indicator and should be used in combination with other factors for a comprehensive analysis of the market.

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This glossary post was last updated: 29th March 2024.

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