On Balance Volume with Cross

26 févr. 2020

OBV indicator with a few key changes that can turn it into a filter or trading indicator as-is.

• Volume calculation given a look-back to help clarify trends without smoothing lag
  
• Change the source (HLC3 indicates a little faster in backtesting)
  
• Smooth the signal if desired
  
• Moving average (MA) added for crossover indication in trend change
  
• MA can be either EMA or HMA**
  

** My personal use:
EMA for trend filtering trades: Trade long signals if OBV is above the MA, trade short signals if OBV is below the MA.
HMA for scalping and chop: Normally set the HMA to 20 or 15 and trade the crosses. Works on most time frames and generates a lot of noise. 5 min and 15 min seems best for me in day trading

Example of trend trading using only the OBV-C and no other indicators, stops, or trailing stops:

This could obviously be improved using stops, trailing stops, or other indicators to filter when to enter & exit trades or mitigate loss.

Example of trading using the HMA and lower time frames with Elder's Force Index (EFI) used as a filter. Trade with both cross at or very near the same time. Winning trades in green:

22 juin 2020

Notes de version

Modification to the standard OBV indicator that adds flexibility and cleaner trend data or more responsive trend changes.

• Change OBV calculation from standard 1 day to custom range
  
• Smooth the OBV line if desired (not suggested, adds lag)
  
• Add a moving average cross to indicator
  
• Change select moving average type to: SMA, EMA, WMA, or HMA
  
• Background highlight for easier dashboard setup
  

Suggested pair with FauxLife EFI to use as a filter & entry/exit setup. Enter or exit trades when the two indicators switch at the same time or within 1-2 candlesticks of each other.