EURUSD 1.1778 USDJPY 112.17 USDCAD 1.2390 EURCZK 26.034 USDCZK 22.097 EURPLN 4.2868 USDPLN 3.6394
EURUSD 1.1778 USDJPY 112.17 USDCAD 1.2390 EURCZK 26.034 USDCZK 22.097 EURPLN 4.2868 USDPLN 3.6394

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The On Balance Volume relates volume to the current price, and may be used for forecasting

Rule of thumb

The idea behind the OBV indicator is that the volume precedes  market prices

 

While its nominal values are of no significance, the OBV may act as a leading indicator, where its trend, potential support and resistance levels may provide useful hints to the further
development of market action

Developed by Joe Granville, the On Balance Volume reflects the demand and supply pressure. Its formula is similar to the Accumulation/Distribution index, as both indicators measure the capital inflow and outflow from  a market.

 

obv, on balance volume, indicator, money flow

 

The construction of the OBV indicator is based on the relation between volume and price changes. Its formula is quite simple - if the current close is higher than the previous close, the current volume is added to the previous OBV value. While, if the current close price is lower than the previous price, current volume is subtracted from the previous OBV value.

 

On Balance Volume signals can be interpreted in terms of divergences between  price action and the indicator. The OBV moving in the same direction as its underlying market confirms the market movement, while discrepancies undermine the significance of  market movements and indicate possible retracement in  a direction designated by the OBV indicator.

 

How to use it with MetaTrader 5:

  • Select a chart for which you want the OBV indicator to be calculated.
  • Go to: Insert - Indicators - Volumes - On Balance Volume.
  • For the “volumes” parameter in the pop-up box, select “tick” instead of “real”.
  • The On Balance Volume will be automatically calculated by MetaTrader 5.

Pola oznaczone gwiazdką są wymagane.

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