On Balance Volume

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mdees1

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Post Number: 4
Registered: 10-2006

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Thursday, February 22, 2007 - 11:20 am:

Ive been reading around and i came across the On Balance Volume indicator. Frank Watkins suggests its a very good indicator in his book Exploding the Myths. I just wanted to know if many people use this indicator and it its any good.

smallworld

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Post Number: 538
Registered: 01-2004

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Thursday, March 01, 2007 - 09:42 pm:

Mdees1
I see that you posted this a week ago and havent had a reply.
I have used on balance volume in a few of my systems as confirmation of a trend. A classical use is look for divergence between price and OBV. Another indicator of similar usage is chaikin Accumulation Distribution. Of the two, OBV seems to perform better. However one of the criticism is that volume is either acculumated as plus or minus depending on whether the close is higher or low than yesterday's close, but it doesn't differentiate whether its is one tick or 10 dollars.
Just like price indicators vs price patterns, Volume indicator doesnt seem to be able to replace Volume patterns, Volume patterns to me seem to tell me most about the energy that is in a move.
I hope I've answered your question.

mdees1

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Post Number: 5
Registered: 10-2006

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Thursday, March 01, 2007 - 10:03 pm:

thanks smallworld il take ur points into consideration when i further analyse OBV

wombat40

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Post Number: 103
Registered: 07-2004

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Friday, April 06, 2007 - 11:33 am:

frank uses obv in a lot of his systems....wen i was last using protrader a year or so ago he was big into darvas boxes incorporating obv.

they tended to go through systems a bit.....

i still use obv to see who is in control..buyers or sellers

wombat