On-Balance Volume Indicator (OBV) refers to a technical indicator of momentum that utilizes the positive or negative flow of the volume of trading to reflect the ...On-BalanceVolumeIndicator(OBV)AtechnicalindicatorofmomentumthatutilizesthepositiveornegativeflowofthevolumeoftradingHome›Resources›Knowledge›Trading&Investing›On-BalanceVolumeIndicator(OBV)WhatistheOn-BalanceVolumeIndicator(OBV)?On-BalanceVolumeIndicator(OBV)referstoatechnicalindicatorofmomentumthatutilizesthepositiveornegativeflowofthevolumeoftradingtoreflecttherelativebuyingandsellingpressureonafinancialassetFinancialAssetsFinancialassetsrefertoassetsthatarisefromcontractualagreementsonfuturecashflowsorfromowningequityinstrumentsofanotherentity.Akey,withtheaimofpredictingtheprobabledirectionofnear-termpricechanges.Inotherwords,OBVtracksincreasingordecreasingvolumetoprojectfuturepricemovements.  OBVwascreatedbyJosephGranvilleintheearly1960sandelucidatedinhisbook,“Granville’sNewKeytoStockMarketProfits.”Granvillearguedthatvolumeisakeydeterminantand,therefore,areliablepredictorofstockpricemovements.Whileheonlyappliedhisnewvolumeindicatortotheanalysisofstocks,ithassincebeenusedbytradersinotherfinancialtradingmarkets,suchascommodityfuturesandforextrading5-StepGuidetoWinningForexTradingHerearethesecretstowinningforextradingthatwillenableyoutomasterthecomplexitiesoftheforexmarket. Theforexmarketisthelargestmarketintheworldintermsofthedollarvalueofaveragedailytrading,dwarfingthestockandbondmarkets.. SummaryOn-BalanceVolumeIndicator(OBV)referstoatechnicalindicatorofmomentumthatutilizesthepositiveornegativeflowofthevolumeoftradingtoreflecttherelativebuyingandsellingpressureonafinancialasset.TheaimofmonitoringtheOBVistopredicttheprobabledirectionofnear-termpricechanges.ThedivergencebetweentheOBVindicatorandthecurrentpricetrendoftensignalsanimpendingtrendchange. FormulaforCalculatingOn-BalanceVolumeYouuseoneofthreepossiblecalculationstogetthecurrenton-balancevolume,thechoiceofwhichdependsontheclosingpriceofthetrade