On-balance volume (OBV) divergence indicator for MT4 download - Free - [TFLab] - MetaTrader 4 Resources

On June 22, 2025, in version 2, the indicator added alert/notification functionality

The Automatic Balanced Volume Divergence (OBV Divergence) indicator is part of the Momentum Technical analysis indicator series for MetaTrader 4 and automatically detects the difference between volume and price.

It allows traders to identify these differences and potential trend reversal points without the need for manual analysis. This Metatrader4 oscillator marks buy signals in blue and sell signals in pink.

Indicator Table

In the image below, the price chart for Sugar with the symbol [SUGAR] is shown on the 1 hour time frame. At the end of the downward correction, the last low was below the previous low (LL), but the OBV divergence curve was rising, showing a bullish (positive) divergence.

In this case, a buy signal appears on the chart. Likewise, at the end of an uptrend, the last high exceeds the previous high (HH), but the indicator curve is falling, showing a bearish (negative) divergence. In this case, a sell signal is issued, indicating a reversal from an uptrend to a downtrend.

Overview

The Automatic Divergence Indicator (OBV Divergence) is a trading tool that identifies potential market trend changes by detecting differences between the indicator direction and price.

Comparing trading volume to price changes can determine the flow of money in and out, making the difference a good indicator of trend reversals .

Buy signal (buy position)

In the image below, the price chart Silver with the symbol (XAGUSD) is shown on a 1 hour time frame. Prices hit a new record lower low at the end of a downtrend , but the indicator curve is trending upward.

This condition indicates buying pressure and the possibility of the trend reversal to the upside, and the indicator shows a buy signal on the chart. form top form bottom

Sell ​​signal (sell position)

In the image below, the price chart Bitcoin with the symbol (BITCOIN) is shown on a 1 hour time frame. At the end of an uptrend , the price makes a new high, but the indicator curve is falling.

This situation indicates selling pressure and the possibility of the trend reversal to the downside , and the indicator shows a sell signal on the chart.

OBV Divergence Indicator Settings

• OBV Period : OBV period is set to 14;
• Number of candles used for pivot calculation : The number of pivot calculations is set to 8;
• Maximum distance between two pivots : The maximum distance between two pivots is 30;
• Minimum distance between two pivots : The minimum distance between two pivots is 5;
• The number of disagreements with the pivot : the number of disagreements with each pivot is 1;
• OBV number of breakthrough lines : The number of RSI line changes is set to 2;
• Shift : Shift is set to 2;
• Sell_Divergence : Set the color of the sell signal to pink or any color of your choice;
• Buy_Divergence : Set the color of the buy signal to blue or any color of your choice;
• Width : The width of the divergence line can be set to 2.

Conclusion

The OBV Divergence Indicator is a technical analysis tool that identifies divergence points between price and volume on different time frames. Divergence occurs when the price and OBV indicator move in opposite directions.

OBV divergence can provide a reliable signal of potential trend changes. However, this volatility indicator can produce false signals in range-bound markets and is therefore best used in trending markets.