Strip away the formula-sounding name and the advance-decline ratio is arithmetic a child could do: take the number of stocks that closed higher that session, divide by the number that closed lower. A session with 1,200 advancing stocks and 650 declining stocks has an AD ratio of about 1.8:1. That's the whole calculation — everything else is interpretation.
What the number is actually counting
The ratio counts stocks, not rupees. A stock that gained 0.1% counts exactly the same as a stock that gained 8% — both are simply 'advancing'. That's a deliberate simplification: the ratio exists to answer one narrow question (how widely was gaining or losing distributed across the market?), not to measure the magnitude of those moves. For magnitude, you'd look at the index level or at specific sector or stock performance instead.
Where it's genuinely useful
- Spotting a broad-based move: a ratio well above 1:1 on a day the index also rose means the gain was widely shared, not concentrated in a few large names.
- Spotting a narrow move: an index that rises while the AD ratio sits near or below 1:1 is a market being carried by a small number of heavyweight stocks — worth noticing.
- Comparing sessions over a week: a string of ratios consistently above 1:1 describes a market with broad underlying strength even if no single day looks dramatic.
Where it falls short on its own
The ratio can't tell you which stocks moved, by how much, or in which sector — that's what the sector heatmap and the stock-level data are for. It also resets every session, so a single day's ratio is a snapshot, not a trend; the trend only shows up when you look at several days' reports together. That's precisely why Signal Desk publishes it as one line inside a fuller daily report rather than as a standalone number: on its own, an AD ratio raises a question that the rest of the report is there to answer.
Every Signal Desk report calculates this ratio from the full count of BSE stocks that traded that session, right next to the raw advances and declines numbers it's derived from — so you can see both the ratio and the count it came from in one place.
Check today's advance-decline ratio →Common questions
Is a higher advance-decline ratio always better?
A ratio above 1:1 means more stocks advanced than declined that session, which generally points to broader participation -- but it says nothing about the size of the moves, so it should be read alongside the index level and sector data, not alone.
Does the ratio account for how much each stock moved?
No. It counts how many stocks advanced versus declined, treating a 0.1% gain the same as an 8% gain. Magnitude is a separate question answered by the index and sector numbers, not by the ratio itself.
Does Signal Desk show the raw advances and declines count, or just the ratio?
Both -- the report shows the raw advances and declines numbers alongside the derived ratio, so you can see exactly what the ratio was calculated from.
The advance-decline ratio is simple arithmetic -- advancing stocks divided by declining stocks -- and it answers one narrow question well: how widely shared was a session's gain or loss. It says nothing about magnitude, which is exactly why Signal Desk reports it alongside the sector heatmap and raw breadth numbers rather than as a number that stands alone.
