OBV (On-Balance Volume)¶
What it shows: a running total of volume: volume is added on candles that close higher and subtracted on candles that close lower.
How people use it: rising OBV means volume is flowing in on up-candles (buying), falling OBV the opposite. It is used to confirm a price move.
Pairs well with: a price breakout or moving-average signal, as volume confirmation.
Settings¶
| Setting | Default | What it does |
|---|---|---|
| Lookback (bars) | 5 | How many candles back "rising" and "falling" compare with. |
You set the defaults on the Indicators page.
Ready-made conditions¶
| For | Condition | Fires when |
|---|---|---|
| Buy | OBV rising (vs 5 bars ago) | every candle OBV is higher than 5 candles before |
| Sell | OBV falling (vs 5 bars ago) | every candle OBV is lower than 5 candles before |
"Above", "below", "is" and "rising" / "falling" stay true on every candle the state lasts, so they can fire many candles in a row.
Warnings you may see¶
None specific to this indicator.
Good to know¶
- It is worked out from closing prices and volume. Because it uses volume, on On candle touch it reads the last closed candle (the forming candle's volume is not known yet).
- Only its direction matters, not its value (which depends on where the data starts).
- It needs no warm-up history: only its direction (compared with its own past) is used, which does not depend on where the data starts.