On December 3rd at 16:00, AICoin editor will share a graphic of 'Advanced Applications of OBV' in the [AICoin PC-end - Group chat - Live broadcast], the following is a summary of the live broadcast content.
In response to last week's request from Baobao regarding indicator sharing, this time I will share the usage of the OBV indicator
The content shared this time was actually posted by the editor last week, I wonder if everyone has seen it: https://www.aicoin.com/zh-Hans/article/431559
The article can be seen in the news section in AICoin, you can follow the official AICoin account～
1. OBV concept
OBV (On Balance Volume), the energy flow indicator, was created by American investment analyst Joe Granville.
OBV is a combined indicator of trading volume and price changes, judging the market power comparison by accumulating daily buy and sell volumes, and is a powerful auxiliary tool for price trends.
Everyone can sync add it in the indicator library and check it out
It's okay not to understand probability, just knowing how to use it is enough
2. OBV usage
Method 1: Determine the trend
This needs to be combined with price judgment
Compared to price, the same rise indicates a bullish trend, while the same fall indicates a bearish trend
You can take a look at this picture
Method 2: Determine main force behavior 1. Main force raises and sells
This can be viewed in a 5-minute cycle, OBV performance is [rapid rise], generally regarded as the main force raising and escaping, which is a sell signal, if it appears at the end of the trend, the effect is more significant
Can judge the slope, the steeper it is, the faster it rises
2. Main force pressure
Price declines, but OBV rises
This usually indicates that the main force is buying on dips, which can be seen as a stop-loss signal
3. Main force selling
Performance is the opposite of main force pressure, OBV line declines while the price rises
This situation usually indicates that the main force is artificially raising the stock price, do not easily go long
4. Main force washing
OBV line rises slowly, but the price fluctuates violently
The more times it is washed, the greater the later space
Method 3: Escape the peak and buy the dip
This mainly combines price to judge OBV divergence
1. OBV bottom divergence, buy signal: Price reaches a new low, but OBV fails to reach a new low
2. OBV top divergence, escape peak signal: Price reaches a new high, but OBV fails to reach a new high
This can be combined with high and low points for the entire custom indicator
For example like this
The buy signal for the 90-minute cycle looks good
Method 4: Use in conjunction with other indicators 1. Use with moving averages
Specific moving averages and parameters can be adjusted according to individual viewing habits
Taking EMA52 + OBV as an example:
When OBV rises while the price remains above the EMA52 moving average, it is regarded as a bullish trend;
When OBV falls from a high point, and the price drops below and remains below the moving average, it is regarded as a bearish trend.
This can also be implemented using custom indicators
2. Break through key support and resistance
Support pressure can be combined with chip peaks
Buy signal: Break above chip resistance or pull back without breaking chip support, while OBV breaks out, regarded as a bullish signal;
Sell signal: Break below chip support or fail to break chip resistance while OBV breaks down, regarded as a bearish signal.
3. Used in conjunction with trading volume
① Combine with total trading volume
After OBV consolidates for a period of time and breaks through MAOBV, while trading volume increases, it is a very good buying opportunity.
Additionally, if there is unusual movement in price but OBV remains horizontal, it usually indicates that market interest is low, and it is also not suitable to enter the market
Different currency pairs have different prices, so indicator data will also vary.
The data of the OBV indicator has little practical significance, just look at the trend
② Combine with moving average of trading volume
Buy signal: OBV rises, and the short-term average volume line crosses above the long-term average volume line
Sell signal: OBV is in a non-trending state, and the short-term average volume line crosses below the long-term average volume line
Buy signals can also be monitored using custom indicators.
As shown
This can also incorporate real trading functions
For example, in my screenshot, if the spot position reaches a certain profit ratio, then sell
For backtesting, the effect is as shown, only doing spot trading
Regarding the indicator usage mentioned above, if everyone is interested, you can contact us to customize indicators
Alright, that's all for the OBV indicator usage I want to share～
Next time I will share the usage of indicator combinations～
That's all for the live broadcast～
Thank you all for your attention, stay tuned to our live room
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