Please research more on your own the different ways you can use OBV, this post is not about the indicator itself but about the “enhancements” I coded on top of this volume indicator. But here is a quick overview: The On-Balance Volume (OBV) indicator is a technical indicator that measures the flow of positive and negative volume. The indicator adds volume on days when the price rises and subtracts it on days when the price declines. It's considered a leading indicator because volume often leads price. An up trending OBV line is an indication of institutional accumulation.
Enhancements: 1) Dots to indicate OBV line New High (NH) and New High Before Price (NHBP). The look back period by default is set to 3 months but could be changed to 6 or 12 months from indicator setting. An OBV line that is making NHBP increases success probabilities of a long trade setup.
2) The OBV line changes color depending on the Up/Down Volume Ratio to quickly visualize the intensity of buying and selling pressure. Up/Down volume ratio of 1 and above indicates buying pressure. The higher the ration the more intense is the buying and visa versa.
Here is an example of SHOP from June 2021 that has the characteristics that increase the probability of this long setup being successful.
SHOP OBV turning Blue in May indicating buying pressure taking over.
While the stock was setting up (and pulling back in June), there was 6 NHBP dots indicating stock being accumulated.
You can also see how OBV line color goes from Blue (Buying pressure), to Cyan (Moderate buying pressure), to Green (Strong buying pressure) all while the setup is forming. Again, indicating stock being "quietly" accumulated.
Right on TA! thanks for putting out some good stuff brother!
TORNADOF5
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hi ,sorry what it show here buying pressure ?? or it is like no where at this point need to wait color change o,O thanks or to use it 4h seems tricky
flywsam
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Nice work brother!
bri6
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Thank you for this most excellent script! Would you consider open-sourcing it? I'm starting to learn pinescript and I learn a lot from others.
Another feature I'd like to add or seen added to it is divergence detection. Your take on adding new highs is brilliant and adding divergence detection would provide yet another warning. See "OBV Divergences" for an open-source example implementation.
MRStoxks
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Hi, thanks for the enhancement, i have one request. Will it be possible to add Bollinger band to it . Waiting for a positive reply :)
Myob1958
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Useful enhancement to OBV, thank you for sharing.
On my PC (Firefox, Win 10), this 'about' page takes a long time to load and I can't scroll down and generates a "something on this page appears to be slowing FIrefox down" pop-up message. When I close the message it finishes loading ok.
RickAdlam
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Love this indicator. Could you add more alerts? I would love to see an alert for strong and intense selling pressure as a cue to approaching low entry levels.
crawler03
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I do like the enhancements but feel too many colors for the U/D ratio. 3 would be handful but thats me.
TaPlot
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@crawler03, you can hange color to just 3 from the settings if u like