Knowledge · Terms · OBV

OBV

Indicator indicator
On-Balance Volume
Cumulative, signed volume: volume is added on green days, subtracted on red ones. If OBV rises with price, the move is „organic“ (volume-backed).

What is OBV?

By Joseph Granville (1963). A running total that adds volume with a sign according to the day's direction:

if close > close[-1]:  OBV += volume
if close < close[-1]:  OBV −= volume
else:                  OBV  unchanged

The absolute OBV value is meaningless — what counts is the direction and whether it agrees with price. Basic assumption (Granville): volume leads price.

Interpretation

  • Confirmation: price and OBV rise together → a healthy, supported trend.
  • Divergence: price makes a new high, OBV does not → a move without volume support, a warning sign (cf. Divergenz).

How Botty uses OBV

  • Filter obv_organic_filter (strategies/conditions/filters.py, Pifagor): requires the OBV-MACD histogram to confirm the trade direction (long only when OBV momentum > 0). Blocks entries when price moves without OBV support — protection against "inorganic" (manipulated) moves.

Limits

❌ Treats a day binary as fully "buy" or fully "sell" — ignores the intra-bar distribution (unlike CMF/MFI). ❌ Jumps on volume spikes; smoothing (MACD/EMA on OBV) is common.