All You Need to Know About The On Balance Volume Indicator (OBV)

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The on-balance volume indicator (OBV) is a momentum indicator that uses volume flow information to help traders better predict stock price changes. Another way to look at the OBV indicator is to reflect the way the crowd sentiment predicts the bullish or bearish market outcomes. Alternatively, how to measure the buying and selling pressure.

The indicator was introduced by Joseph Granville back in 1963. He published the concept in his book “New Key to Stock Market Profits,” where he analyzed the importance of volume for tracking the changes in security prices.

The concept for the indicator is based on the idea that when there is an increase in trading volume, even if it doesn’t affect the price at first, at some point, it will. The price will then go up or down, depending on what types of orders prevail.

When the indicator was first introduced, it was considered something revolutionary. Even today, it remains widely popular among technical traders. However, as soon as market volume became a target for manipulations, the principles most volume indicators are based on started losing their usefulness.

Today, traders also use the on-balance volume indicator as a tool to help them find out when institutional and retail investors are present on the market. It also lets them distinguish the volume generated by either group. If, for example, the volume increases, but the price remains relatively flat, at first, it is considered an indication that pension and mutual funds might be buying the instruments retail investors are selling. Once the price follows the volume and goes up, institutional investors start selling, while retail investors start buying.

0:00 Music Intro
0:13 Intro
0:47 Disclaimer
1:00 On Balance Volume
3:19 How it works
4:55 The calculation
5:25 Using the tool
7:10 Bearish divergence
7:55 Bullish divergence
8:30 Trend confirmation
9:42 Breakouts
11:02 Exhaustion
12:30 Final thoughts

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[Vemrah]

What a great explanation - i am so happy to find this channel - great work!

[luckytonyuyeh]

Thank you! for the clarity of explanation of the OBV INDICATOR.I can practice it well and apply it to my technical analysis

[mariotrevino]

Thank you very much for share good and valuable information. Greetings from Monterrey, Nuevo León.

[ЛеонардВодопьянов]

ty for you videos and work. we really appreciate it

[yuthpatirathi]

Damn ! Dude your explanation is beautiful. I am glad I came across this channel

[dileepaha]

Thanks for the valuable content. Could you please throw some light on the time frames where OBV works? Intraday / Daily / Weekly / Monthly?

[arielenriqueenriquezcastil]

What time frame is recommended for this

[sumitkumar]

Nice post, would like to know is this OBV indicator really help in prediction of stock price or its upward or downward trend. Waiting for your response

[WayneBonham-tb]

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[jrj]

How to find out that institutions buying or retailers buying ?

[johnnyxthemacnifient]

nice explained but can;t NOT see obv line. way to light..you are clear with talking but show also clear where we need to look..

[DanielXhafa-wdcz]

your everyday life will become a better, if you will got few different sources of income. think about it

[HertyKelly]

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