On Balance Volume Divergence (OBV) indicator download for MT5 - Free - [TFlab]

The Balanced Volume Divergence indicator , one of the basic tools among the MetaTrader 5 indicators , is used for identifying price divergences . Developed by Joseph Granville , this indicator combines trading volume and price movement to analyze buy pressure and sell pressure effectively.

One of OBV's unique features is its ability to detect hidden trends and divergences , making it valuable for traders looking for lucrative trading opportunities.

Indicator specifications

The following table briefly explains the details of this indicator:

Indicator overview

When OBV and price move in the same direction, this alignment signals a continuation of the current trend and indicates a strong uptrend. Conversely, divergence between OBV and price can serve as a warning of a potential trend reversal.

These features, along with buy and sell signals displayed via green and red arrows, provide traders with the opportunity to enter trades.

Indicators are in an upward trend

In the one-hour chart of the EOS cryptocurrency , price set new lows below levels established by indicators.

After identifying the price trend, the indicator issues a Buy Signal , providing traders with suitable trading opportunities.

Indicators are in a downward trend

When price rises but OBV falls, this situation indicates bearish divergence . In the price chart of the AUD/NZD currency pair , bearish divergence indicates a weakening of the upward price trend.

This situation increases the possibility of a reversal or shift to the downtrend and the indicator sends a Sell Signal after identifying these areas.

OBV indicator settings

Full details of the indicator settings are shown in the image above:

• Chart Theme: adjust the chart theme;
• Applied Price: Select the reference price for indicator calculation (such as closing price);
• Draw Divergence: Enables drawing divergence lines on the chart;
• Show Classic Divergence: Display classic divergence to identify standard trend changes;
• Show hidden divergences: Show hidden divergences to discover hidden trading opportunities;
• Visible divergence on sub-window: Divergence is displayed in the indicator’s sub-window;
• Visible divergence on the chart: display 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: Enable alerts when divergence signals are 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: Enables audible alerts when disagreements are discovered;
• Sound File: Select a specific sound file.

Conclusion

One of the main advantages of this product is that the OBV indicator is its ability to confirm ongoing trends and signal potential trend reversals .

For example, in this signal and forecast indicator , the alignment between OBV and price indicates trend strength and continuity , whereas divergence between them serves as a warning of a possible reversal .