📈 Indicators·intermediate

OBV (On-Balance Volume)

Also called: on balance volume

A volume indicator that adds volume on up days and subtracts it on down days — used to confirm trends and spot divergences.

On-Balance Volume is a cumulative volume indicator. On every up bar, the bar's volume gets added to OBV. On every down bar, the bar's volume gets subtracted. The result is a running total that rises when buyers are aggressive and falls when sellers are aggressive. OBV's main use is confirming trends and spotting divergences. If price is making new highs and OBV is also making new highs, the trend has volume support — it's healthy. If price is making new highs but OBV is flat or falling, that's a bearish divergence and the trend is in trouble. OBV works on stocks, futures, and crypto where volume data is centralized. On spot forex (where volume is fragmented across many liquidity providers), OBV is less reliable.

Real trade example

NAS100 printed a clear bearish OBV divergence in November 2021 — price made a new ATH but OBV made a lower high. The reversal led to a 33% bear market over 12 months.

Related terms

MFI (Money Flow Index)

intermediate

A volume-weighted RSI that measures buying and selling pressure — values above 80 are overbought, below 20 are oversold.

Divergence

intermediate

When price moves in one direction but a momentum indicator moves in the opposite direction — a warning of trend exhaustion.

Supertrend

intermediate

A trend-following indicator based on ATR that plots a single line above or below price — line below means uptrend, above means downtrend.

Golden Cross

beginner

When a short-term moving average (typically 50-day) crosses above a long-term moving average (typically 200-day) — a major bullish signal.

Death Cross

beginner

When a short-term moving average (typically 50-day) crosses BELOW a long-term moving average (typically 200-day) — a major bearish signal.

Moving Average

beginner

A smoothed line showing the average price over a recent period — the most-used indicator in technical analysis.

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