OBV+ (v0.1)
Just playing around with some ideas I had with On Balance Volume (OBV). Added a divergence spotter and EMA's that all uses OBV as a source. Let me know if you have any feedback!
My main use of OBV:
1) Confirm trend continuation: When price has a clear trend, OBV should be aligned with the trend.
2) Discover price reversal: When price and OBV moves in opposite directions, you can expect a reversal.
DIVERGENCE SPOTTER
The spotter will tell you when there are divergences between OBV and price. These are useful as they can indicate a trend reversal;
Regular Bullish Divergence
If price is making lower lows (LL), but the OBV is making higher lows (HL), this is considered to be regular bullish divergence .
This normally occurs at the end of a DOWNTREND.
Regular Bearish Divergence
Now, if the price is making a higher high (HH), but the OBV is lower high (LH), then you have regular bearish divergence.
This type of divergence can be found in an UPTREND. After price makes that second high, if the OBV makes a lower high, then you can probably expect price to reverse and drop .
Hidden Bullish Divergence
This can be seen when the pair is in a UPTREND.
Once price makes a higher low (HL), look and see if the OBV does the same.
Hidden Bearish Divergence
Lastly, we’ve got hidden bearish divergence.
This occurs when price makes a lower high (LH), but the OBV is making a higher high (HH).
By now you’ve probably guessed that this occurs in a DOWNTREND.
When you see hidden bearish divergence, chances are that the pair will continue to shoot lower and continue the downtrend.
My main use of OBV:
1) Confirm trend continuation: When price has a clear trend, OBV should be aligned with the trend.
2) Discover price reversal: When price and OBV moves in opposite directions, you can expect a reversal.
DIVERGENCE SPOTTER
The spotter will tell you when there are divergences between OBV and price. These are useful as they can indicate a trend reversal;
Regular Bullish Divergence
If price is making lower lows (LL), but the OBV is making higher lows (HL), this is considered to be regular bullish divergence .
This normally occurs at the end of a DOWNTREND.
Regular Bearish Divergence
Now, if the price is making a higher high (HH), but the OBV is lower high (LH), then you have regular bearish divergence.
This type of divergence can be found in an UPTREND. After price makes that second high, if the OBV makes a lower high, then you can probably expect price to reverse and drop .
Hidden Bullish Divergence
This can be seen when the pair is in a UPTREND.
Once price makes a higher low (HL), look and see if the OBV does the same.
Hidden Bearish Divergence
Lastly, we’ve got hidden bearish divergence.
This occurs when price makes a lower high (LH), but the OBV is making a higher high (HH).
By now you’ve probably guessed that this occurs in a DOWNTREND.
When you see hidden bearish divergence, chances are that the pair will continue to shoot lower and continue the downtrend.
Release Notes:
Top and Bottom Spotter
This is a quick and dirty attempt at highlighting extreme tops and bottoms. There's a few ways calculate this, so the current method won't catch 'em all. It's best to take note of OBV's location in relation to the low and high bands (green and red color respectively)
I'm just playing around here, so would be sweet if anyone would want to help by looking at a bunch of timeframes and securities / bitt coins to look for interesting stuffs.
FYI This is very much one of those tools that acts as a supplement to your existing TA tools. It is not intended to be a standalone god-mode satoshi maker tool.
This is a quick and dirty attempt at highlighting extreme tops and bottoms. There's a few ways calculate this, so the current method won't catch 'em all. It's best to take note of OBV's location in relation to the low and high bands (green and red color respectively)
I'm just playing around here, so would be sweet if anyone would want to help by looking at a bunch of timeframes and securities / bitt coins to look for interesting stuffs.
FYI This is very much one of those tools that acts as a supplement to your existing TA tools. It is not intended to be a standalone god-mode satoshi maker tool.
Release Notes:
Added alert conditions.
"Enter" = Go long / Exit short
"Exit" = Exit long / Go short
"Enter" = Go long / Exit short
"Exit" = Exit long / Go short