On balance volume indicator showing different signal on different time frames
How do you read a balance volume indicator?
The OBV values may be high or low and move further from the line, but at some point, they can cross above or below the zero line. On-balance volume has a positive value when the price today is higher than the previous closing price, while a negative value appears if today’s price is lower than the last closing price.
Is On Balance Volume reliable?
OBV gives the most reliable feedback around tests of major highs and lows, making it a perfect tool to measure the potential for breakouts and breakdowns.
Is On Balance Volume a lagging indicator?
One limitation of OBV is that it is a leading indicator, meaning that it may produce predictions, but there is little it can say about what has actually happened in terms of the signals it produces. Because of this, it is prone to produce false signals. It can therefore be balanced by lagging indicators.
How do you trade with balance volume indicator?
Quote:
Quote: So i want to focus on the most. Recently available price action which is this short uptrend now as we can see here if we draw lines across the price action and the obv indicator. They're both rising.
What does it mean when on balance volume is negative?
Negative volume balance is a sign of weakness. It shows that the stock falls on high volume and reacts upwards on low volume. This indicates that investors are worried about not being able to sell when something happens, and also hesitant to buy on rising prices. Volume balance is a very important indicator.
Is OBV a leading indicator?
On-balance volume (OBV) is another leading momentum-based indicator. It looks at volume to enable traders to make predictions about the market price – OBV is largely used in shares trading, as volume is well documented by stock exchanges.
What is the best volume indicator?
The 6+ Best Volume Indicators in Day Trading
- VWAP.
- Volume-Weighted Moving Average (VWMA)
- Money Flow Index (MFI)
- Accumulation and distribution indicator.
- Klinger Oscillator.
- On Balance Volume (OBV)
- Other volume indicators.
What is the difference between volume and on balance volume?
On Balance Volume (OBV) measures buying and selling pressure as a cumulative indicator that adds volume on up days and subtracts volume on down days. When the security closes higher than the previous close, all of the day’s volume is considered up-volume.