OBV is a running total of volume based on price direction.
Volume is added on up days and subtracted on down days.
Rising OBV indicates net buying pressure.
Falling OBV indicates net selling pressure.
Flat OBV indicates balanced or low conviction market conditions.
What It Measures
OBV is a running total of volume based on price direction.
Volume is added on up days and subtracted on down days.
Rising OBV indicates net buying pressure.
Falling OBV indicates net selling pressure.
Flat OBV indicates balanced or low conviction market conditions.
Institutional Use
OBV is used to confirm whether price trends are supported by underlying volume participation or whether they are structurally weak.
It is not used to generate direct buy or sell signals.
Its real value lies in identifying divergence between price and volume flow, which often signals accumulation, distribution, or early stage trend exhaustion.
Key Signals
Price rising with rising OBV confirms bullish trend with real participation.
Price falling with falling OBV confirms bearish trend.
Bullish divergence: price makes lower lows while OBV holds higher — hidden accumulation.
Bearish divergence: price makes higher highs while OBV weakens — hidden distribution.
Trading Playbook
Trend confirmation: enter trend when OBV is trending strongly in the same direction as price.
Divergence setup: OBV makes new highs before price — early accumulation signal.
Exit when OBV diverges from price or begins trending against the position.
When Not to Trade
Avoid OBV signals in low volume environments.
Do not use in isolation without price structure confirmation.