On Balance Volume Plus

WHAT IS IT?

On Balance Volume (OBV), developed by Joe Granville, accumulates volume on up-bars and subtracts it on down-bars, creating a running total that reflects cumulative buying and selling pressure. It is based on the principle that volume precedes price. The raw OBV line is cumulative, scale-dependent, and difficult to compare across instruments or timeframes.

INDICATOR PRIME IMPROVEMENTS

On Balance Volume Plus applies z-score normalization, converting the OBV line to standard deviations from its own mean and making it instrument-agnostic. A signal line (EMA) is applied to normalized OBV, and their difference forms a smoothable histogram. Green bars indicate OBV above its signal (accumulation dominant), red bars indicate distribution. Signal crossovers require ADX qualification and cooldown. Regular and hidden divergence detection is built in.

HOW TO USE

Watch for OBV crossovers of its signal line when the histogram is building momentum. Rising histogram turning green while price trends upward confirms institutional volume participation. Hidden bullish OBV divergences (price making higher lows while OBV makes lower lows) are strong trend continuation signals for swing trading. Most reliable on 1H and higher timeframes.

KIT CONFLUENCE

On Balance Volume Plus and Master Accumulation & Distribution form the volume pair of this kit. OBV weights full bar volume by price direction; A/D weights by close position within the bar. When both histograms simultaneously confirm the same direction, institutional buying or selling is confirmed from two independent volume calculations. Combined with Premium Divergence, this creates price momentum plus dual-volume confluence.