One can expect prices to move higher if OBV is rising while prices are either flat or moving down. Whereas falling OBV reflects negative volume pressure which can lead to lower prices. If today’s closing price equals yesterday’s closing priceĬurrent OBV = Previous OBV InterpretationĪccording to Granville’s theory, a rising OBV reflects positive volume pressure which can lead to higher prices.If today’s closing price is lower than yesterday’s closing priceĬurrent OBV = Previous OBV – today’s volume.If today’s closing price is higher than yesterday’s closing priceĬurrent OBV = Previous OBV + today’s volume.There are three rules implemented when calculating on-balance volume (OBV): According to him, when volume increases sharply without a significant change in the stock’s price then the price will eventually jump up and when volume decreases sharply without a significant change in the stock’s price then the price will eventually jump down. This indicator was developed by Joseph Granville. It is a momentum indicator that measures positive and negative volume flow. The On-Balance-Volume is a technical analysis indicator used to measure the positive and negative flow of volume in a security over time. Here are some of the most widely used technical analysis indicators in stock trading: 1. Top 9 Widely Used Technical Analysis Indicators: Moving Average Convergence Divergence(MACD) Indicator The Accumulation/Distribution line (A/D line) Let us discuss those tools today:- Table of Contents Technical analysis is an art and science of predicting future prices from past price movements that have given investors new technical analysis indicators. There was a time long ago when trading in stocks was a simple game of buying and selling. Always be a student and keep learning.” – John Murphy “ Technical analysis is a skill that improves with experience and study. Learning about the technical analysis indicators will help you in doing so.
But if you have an eye for spotting market trends, then you make profits. If you are untrained, then day trading in stocks is very risky.
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