Technical Indicators
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On Balance Volume (OBV)

Created by Joe Granville in th 1960s. It measures buying and selling pressure as a cumulative indicator that adds volume on up days and subtracts volume on down days. You can use it to see momentum. A more accurate version of this indicator is the Chaikin Oscillator.


When the OBV moves up it indicates a lot of buyers and gives an indication that it is accumulated by a lot of people. And there is an uptrend. If it moves down it indicates more people are selling. And you are in a downtrend.

If price and the On Balance Volume indicator are not showing the same trend, then this shows a possible exit of a trade when the price is still going up but the OBV is moving down.

If the market is moving sideways then a rising On Balance Volume tells you breakout upwards is coming. And if the OBV is moving downward this warns you of a breakout downwards.

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