OBVoscillator
Title: OBV Oscillator
Author: OsborneCapital
The OBV (On Balance Volume) Oscillator developed by OsborneCapital is a distinctive variant from commonly published OBV indicators. This script capitalizes on the primary concept of the OBV, which is to cumulatively add or subtract the entire volume of each bar to a total, based on whether the closing price was higher or lower than the previous close. However, the OBV Oscillator by OsborneCapital improves upon this by introducing an additional layer of analysis.
Key Differences:
Oscillator Formulation:
The original OBV serves as a cumulative measure of buying and selling pressure. It does not naturally oscillate around a zero line. This script transforms OBV into an oscillator, offering a normalized view around a baseline (zero) for a more intuitive interpretation of buying and selling pressure.
Normalized Scaling:
The OBV Oscillator scales the OBV values down by a user-defined factor (default 1000), helping adapt the indicator to the magnitudes of the underlying market's volume profile.
Moving Average Comparison:
This script compares the scaled OBV with a Moving Average (MA) over a user-defined period, enhancing the visibility of divergences and convergences between volume trends and price action.
Usage:
The OBV Oscillator by OsborneCapital provides visual cues about the underlying buying or selling pressure, which is not directly visible from the price chart:
- Above zero line: Suggests the dominance of buying pressure, which may indicate an ongoing bullish sentiment.
- Below zero line: Indicates the dominance of selling pressure, hinting at bearish sentiment.
- Crossing the zero line: A change in the trend's direction, from bullish to bearish or vice versa.
Markets and Conditions:
The OBV Oscillator can be used across various markets, including but not limited to stocks, forex, cryptocurrencies, commodities, and futures. As this script fundamentally builds on volume analysis, it tends to be more effective in markets where volume information is reliable and significant.
It's always recommended to use this tool in conjunction with other indicators and analysis methods, as it mainly provides insights into volume trends and doesn't consider price levels or price-based trends. The indicator can be particularly effective in identifying potential breakouts when there's a divergence between the OBV Oscillator and the price trend.
Please remember, no indicator alone can guarantee success in trading, and a comprehensive approach, including risk management, should always be employed.
Author: OsborneCapital
The OBV (On Balance Volume) Oscillator developed by OsborneCapital is a distinctive variant from commonly published OBV indicators. This script capitalizes on the primary concept of the OBV, which is to cumulatively add or subtract the entire volume of each bar to a total, based on whether the closing price was higher or lower than the previous close. However, the OBV Oscillator by OsborneCapital improves upon this by introducing an additional layer of analysis.
Key Differences:
Oscillator Formulation:
The original OBV serves as a cumulative measure of buying and selling pressure. It does not naturally oscillate around a zero line. This script transforms OBV into an oscillator, offering a normalized view around a baseline (zero) for a more intuitive interpretation of buying and selling pressure.
Normalized Scaling:
The OBV Oscillator scales the OBV values down by a user-defined factor (default 1000), helping adapt the indicator to the magnitudes of the underlying market's volume profile.
Moving Average Comparison:
This script compares the scaled OBV with a Moving Average (MA) over a user-defined period, enhancing the visibility of divergences and convergences between volume trends and price action.
Usage:
The OBV Oscillator by OsborneCapital provides visual cues about the underlying buying or selling pressure, which is not directly visible from the price chart:
- Above zero line: Suggests the dominance of buying pressure, which may indicate an ongoing bullish sentiment.
- Below zero line: Indicates the dominance of selling pressure, hinting at bearish sentiment.
- Crossing the zero line: A change in the trend's direction, from bullish to bearish or vice versa.
Markets and Conditions:
The OBV Oscillator can be used across various markets, including but not limited to stocks, forex, cryptocurrencies, commodities, and futures. As this script fundamentally builds on volume analysis, it tends to be more effective in markets where volume information is reliable and significant.
It's always recommended to use this tool in conjunction with other indicators and analysis methods, as it mainly provides insights into volume trends and doesn't consider price levels or price-based trends. The indicator can be particularly effective in identifying potential breakouts when there's a divergence between the OBV Oscillator and the price trend.
Please remember, no indicator alone can guarantee success in trading, and a comprehensive approach, including risk management, should always be employed.