Just looking at it with the naked eye this indicator seems useful for determining if a pump is real or just a retest by seeing if it takes over the 0 line. Acts as support as well very well.
Could you expand on how to make the best use of this indicator?
Does it work as SR on itself, previous bottoms and tops or just when interacting with 0 line? noob here
Thanks!
SpaghettiScott
⋅
I propose a new formula for OBV. My first suggestion (which will not work) is simply to use the difference in closing price between two candles as a multiplier for volume. The product can be negative or positive depending on whether price moved up or down. This product can now be added or subtracted to the previous period in the same way as traditional OBV.
The problem with this formula is that if the candle were short with high volume or a doji, or a hammer, the multiplier would be less than if the candle actually moved with the volume…
This would not serve well for finding accumulation and distribution: for finding divergences between price and volume.
The second false solution is that the inverse of the multiplier should be used as a multiplier for volume, if you would like to use this new kind of OBV indicator in the same way as traditional OBV.
The plain English translation is that if there is a lot of volume but only a little price movement then there is either accumulation or distribution going on. The problem with this solution is that a slightly red candle will amplify volume signature even if it is on the wrong side of an accumulation phase.
My third suggestion is a combination of using the price movement as a multiplier and Chaikin Money Flow candle wick analysis as a multiplier.
and....... then i found your indicator... thanks a lot
JustinLanePieper
⋅
I'm not able to see the lines when trading forex. please help? is there a setting I can use to use this indicator all the time?
Could you expand on how to make the best use of this indicator?
Does it work as SR on itself, previous bottoms and tops or just when interacting with 0 line? noob here
Thanks!