On Balance Volume (OBV) Explained: What It Is and How It Works
By adding a period’s trading volume when the closing price rises and subtracting it when the closing price falls, on-balance volume creates a single cumulative line. Known to traders as OBV, this technical indicator moves up or down in response to buying and selling pressure. For traders and investors using technical analysis, it offers a volume-based perspective on trend strength that price alone cannot provide.
When volume no longer supports a market move, OBV can help traders identify early warning signs, as well as confirm trends across stocks, forex, gold and cryptocurrencies. This article explains what the indicator measures and how it is calculated before examining how to read it on a live chart and interpret signals such as divergences. It also covers OBV’s limitations, trading strategies that incorporate it, its use on MT4 and MT5, and comparisons with related tools such as the Accumulation/Distribution line.
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2026-11-04 08:30:57