OBV (On Balance Volume)

OBV adds up traded volume cumulatively to show whether money is flowing into buying or selling.

Add it on the live chartTest an idea in the AI Lab

What it is

Joseph Granville introduced On Balance Volume in 1963. The idea is that volume moves before price: if more volume trades on up days, buyers are accumulating.

How it's calculated

  1. If the close is above the previous close: OBV = previous OBV + volume
  2. If below: OBV = previous OBV − volume
  3. If equal, OBV doesn't change.

How traders read it

  • The OBV number itself means nothing; its direction and slope matter.
  • OBV rising with price confirms the trend.
  • Divergence: price makes a higher high but OBV doesn't, so volume isn't backing the move.

Settings

OBV has no settings. To read it more easily, some traders draw a moving average on it.

Where it misleads

  • One day of unusual volume (news, for example) can shift OBV for a long time.
  • In markets without centralised volume, such as forex, OBV uses tick volume and is less precise.

Its Pine Script on Vlevel

This is the script the chart runs. In the chart's indicators window you can open it, change it and save your own copy.

On Balance Volume · Pine Script v6
//@version=6
indicator("On Balance Volume", shorttitle = "OBV", format = format.volume)
obv = ta.cum(math.sign(ta.change(close)) * volume)
plot(obv, "OBV", color = #1fb8ff)

Indicators describe past prices; none predicts the future. For education, not investment advice.