ON BALANCE VOLUME (OBV)

  
On Balance Volume (OBV) is most popular indicator to identify buying  pressure or selling pressure.

Description :

On Balance Volume (OBV) is derive by adding volume when price close up & subtracting when price close down.

With positive divergence OBV gives buy signal and with negative divergences OBV gives sell signal

How to Calculate?

 Do cumulative total of volume where volume add if price close up and  subtract when price close down.



Divergence in the On Balance Volume (OBV):

A lower peak in the On Balance Volume (OBV) against higher highs in the stock market called negative divergence and typically it's a Sell signal.
A higher peak in the On Balance Volume (OBV) against lower lows in the stock market called positive divergence and typically it's a Buy signal.

To get good result with On Balance Volume (OBV) we need to use it with other technical indicators like Moving Average (MA) | Percentage Price Oscillators (PPO) | Price Rate Of Change (ROC) | Relative Strength Index (RSI) | Stochastic Oscillator (STO) | Commodity Channel Index (CCI) | Chaikin Money Flow oscillator (CMF). When we use two or three technical indicators and in case of positive divergence and negative divergence it giving real good result, only you need to change time span and find out which is a better pair for you.