Chartanalysen Square - Indicators

On-Balance-Volume (OBV)

In technical analysis, a strong focus is on the trading volume of the underlying. The reason is that an up / down movement of a value generally confirmed by the volume growth should! An uptrend, which is underpinned by growing volume is correspondingly meaningful as a trend in the decrease the volume.

Instead of vertical volume bar is the on-balance volume indicator development in a very graphic graphs from. Was developed, and in the book "Granville's New Key to Stock Market Profit" described in detail the OBV by Joseph Granville. Its ease of use and the positive results in the OBV trend phases made quickly popular and it is also about half a century after its invention, one of the favorite indicators in technical analysis.

In calculating the OBV is first looked to see whether the closing price of the current day is higher than the previous day's (upward movement), or if the current is below the closing price on preceding (downward movement). at a upward movement is added, add the turnover / volume for OBV value of the previous day. Be in a downward movement subtracts the values accordingly.

The values of obvs basically play no role, but the mapping of values should simply an upward trend with a rising OBV line and confirm a downward trend of the underlying should be covered with an OBV line accompanied

Basically, I use two Interpretations which is the ratio between the performance of the underlying and the OBV line result.

Interpretation of OBV

  • 1. The OBV trendline is broken
  • 2. It occurred to divergences between the price movements of the underlying asset and the OBV line

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