On Balance Volume with Cross

OBV indicator with a few key changes that can turn it into a filter or trading indicator as-is.

  • Volume calculation given a look-back to help clarify trends without smoothing lag
  • Change the source (HLC3 indicates a little faster in backtesting)
  • Smooth the signal if desired
  • Moving average (MA) added for crossover indication in trend change
  • MA can be either EMA or HMA**

** My personal use:
EMA for trend filtering trades: Trade long signals if OBV is above the MA, trade short signals if OBV is below the MA.
HMA for scalping and chop: Normally set the HMA to 20 or 15 and trade the crosses. Works on most time frames and generates a lot of noise. 5 min and 15 min seems best for me in day trading

Example of trend trading using only the OBV-C and no other indicators, stops, or trailing stops:
This could obviously be improved using stops, trailing stops, or other indicators to filter when to enter & exit trades or mitigate loss.

Example of trading using the HMA and lower time frames with Elder's Force Index ( EFI ) used as a filter. Trade with both cross at or very near the same time. Winning trades in green:
Phát hành các Ghi chú: Modification to the standard OBV indicator that adds flexibility and cleaner trend data or more responsive trend changes.
  • Change OBV calculation from standard 1 day to custom range
  • Smooth the OBV line if desired (not suggested, adds lag)
  • Add a moving average cross to indicator
  • Change select moving average type to: SMA, EMA, WMA, or HMA
  • Background highlight for easier dashboard setup

Suggested pair with FauxLife EFI to use as a filter & entry/exit setup. Enter or exit trades when the two indicators switch at the same time or within 1-2 candlesticks of each other.
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Bình luận

Looks cool will have to try this out thanks! One question, is it recommended to use on 2hr?
Phản hồi
fauxlife execution
@execution, The 2hr is what I use to trade forex since I don't have the time during the day to watch charts. Gets you into a trend that can run all week or a day or two on average. 😊
+1 Phản hồi
Appreciate that Sir!
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