On Balance Volume Divergence (OBV) indicator download for MT4 - Free - [TFlab]

The On-Balance Volume Divergence (OBV) indicator analyzes market buying and selling pressure using a combination of volume data and price movements .

This trading aid indicator , developed by Joseph Granville , utilizes cumulative volume changes to identify hidden trends and divergences in the market.

Indicator specifications

The information related to this indicator is summarized in the following table:

Indicator overview

The OBV Divergence indicator helps confirm price trends and identify potential changes in market direction. When OBV and price move in the same direction, the current trend is confirmed.

For example, simultaneous increases in price and OBV indicate an uptrend .

Conversely , divergence between OBV and Price warns of potential trend reversals . The green arrow represents a buy signal and the red arrow represents a sell signal.

Indicators are in an upward trend

When the price declines but the OBV rises, this may indicate a potential reversal to an uptrend .

This indicator highlights these areas by displaying a green arrow Buy Signal for traders.

Indicators are in a downward trend

On the USD/CHF price chart, when price increases but OBV decreases, this may indicate a potential reversal downtrend .

Traders can enter a Sell trade after the indicator generates a red arrow signal, which is confirmed with additional verification.

OBV indicator settings

This image shows all the details related to the indicator settings:

• Chart Theme : adjust the chart theme;
• Applied Price : Select the reference price for indicator calculation (such as closing price);
• Draw Divergence enables divergence lines on the chart;
• Display Classic Divergence Displays Classic Divergence to identify standard trend changes;
• Show hidden divergences Show hidden divergences to discover hidden trading opportunities;
• Divergence visible on the sub-window shows divergence in the indicator's sub-window;
• Visible divergence on the chart displays the divergence directly on the price chart;
• Bullish Divergence Color : Select the color of the bullish divergence line (usually light blue);
• Bearish Divergence Color : Select the color of the bearish divergence line (usually pink-purple);
• Alerts On enables alerts when a divergence signal is detected;
• Alert Message : Send an alert message when a signal occurs;
• Alert Email : Send an alert to the user's registered email address;
• Alert Sound activates an audible alarm when a divergence is detected;
• Sound File : Select a specific sound file.

Conclusion

The OBV indicator , classified as one of the signal and forecast indicators , evaluates buy/sell pressure by analyzing trading volume and price movement .

Additionally, it identifies hidden trends and divergences to determine optimal entry and exit points for trades.