Volume
On Balance Volume (OBV)
OBV adds the day's volume when the close is up and subtracts it when the close is down, giving a running total of buying vs selling volume.
How to read it
- Rising OBV with rising price confirms the move.
- Price rising while OBV falls is a warning (divergence).
- Look at the direction of OBV, not its absolute number.
Settings
No settings.
Example rule to test
Check idea: before trusting a breakout, see whether OBV is also making a new high.
Common mistake
Comparing OBV numbers between two different stocks.
Try it free on iTradeChart
For learning only. Backtests use past data and do not guarantee future results. Not investment advice.