On-balance Volume (OBV)
factor.formula
OBV calculation formula:
OBV Initial Value:
The formula calculates OBV based on the current and previous trading day's closing prices (CLOSE) and the current trading day's volume (VOL). When the current closing price is higher than the previous closing price, the current volume is added to the previous period's OBV value; when the current closing price is lower than the previous closing price, the current volume is subtracted from the previous period's OBV value; when the current closing price is equal to the previous closing price, the OBV value remains unchanged.
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OBV value for the current trading day
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OBV value of the previous trading day
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Volume of the current trading day
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Closing price of the current trading day
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Closing price of the previous trading day
factor.explanation
The core concept of the On-Body Volume (OBV) indicator is that volume is a leading indicator of price changes, so the momentum of market funds can be reflected by cumulative volume. If the price rises and the OBV rises, the upward trend is considered reliable. On the contrary, if the price rises but the OBV falls, it may indicate that the upward momentum is insufficient and there is a potential reversal risk. OBV can help investors identify the strength of market trends and find the divergence between price and volume, thereby assisting in judging potential buying and selling opportunities. This indicator is suitable for different time periods and can be used for the analysis of various financial assets such as stocks, futures, and foreign exchange.