Forex on balance volume

NY Fed Empire State manufac Wholesale Price Index Period: CPI is the key gauge for inflation in the Eurozone. Positions should be held until the trend changes. We never know for sure if an OBV trend line break will materialize into a price trend reversal so its presence can provide a warning to the trader.

Therefore, On Balance Volume OBV indicator builds links between the volume and the price change accompanying the certain volume. The mechanism of its work is not difficult. When the closing price of the ongoing bar is under that of the previous bar, the volume will be .

What is 'On-Balance Volume (OBV)'

However, as the index is not as comprehensive as formal housing reports like new home sales or MBA mortgage applications, the index acts more like a supplemental indicator for predicting housing trends. Given that new home sales reflect 'big ticket' items that require construction and investment, the housing market is often viewed as an indicator of the direction of the economy as a whole.

Growth in the housing market will spur subsequent spending, generating demand for goods and services and the employees who provide them. The report headline is expressed in percentage change from the previous month. Measures Capital Flow into U.

Summarizes the flow of stocks, bonds and money market funds to and from the United States. The headline figure is the difference in value between American purchases of foreign securities and foreign purchases of American securities, expressed in millions of dollars.

The Treasury International Capital or TIC statement is a major component of the American capital account and gives valuable insight into foreign demand for American investments and dollar. A positive figure indicates that more capital is entering the US than leaving as sales of American securities to foreigners exceed American purchases of foreign securities. Such positive figures suggest that American security markets are competitive with those of other countries.

Foreign security purchases are especially important in the case of a trade deficit, as a positive figure can offset the depreciating effect of a trade shortfall.

On the contrary, a negative or declining TICS figure reflects a declining capital flow picture. Outflows are indicative of weaker demand for US assets which puts downward pressure on the value of the dollar. A key feature of the TIC data is its measurement of the types of investors the dollar has; governments and private investors. Usually, a strong government holding of dollar denominated assets signals growing dollar optimism as it shows that governments are confident in the stability of the US dollar.

Most importantly seems to be the purchases of Asian central banks such as that of Japan and China. As for absolute amount of foreign purchases, the market generally likes to see purchases be much stronger than the funding needs of that same month's trade deficit. If it is not, it signals that there is not enough dollars coming in to match dollar going out of the country. Officially called the Consumer Sentiment Index, this figure measures the level of consumer confidence and is an average of five indices measuring different aspects of consumer fiscal health.

This is one of the few indicators that are entirely expectation-based. Households report their views on current buying conditions for household items and where they feel are the "wisest" places to invest savings. Views on future political policy taxes, politicians, government and economic conditions wages, inflation, unemployment are also surveyed.

Confidence figures are often leading indicators for the consumer spending and the economy as a whole. The headline figure is percentage change in the index value from that of the previous month.

It represents correlation between volume and changes in a price. If the close is higher than the previous one, then the volume is added to the previous value of the indicator. However, if the close is lower than the previous one, the volume is subtracted from the previous OBV value.

OBV indicator moves slightly faster than the price changes. An increasing on-balance volume shows that professionals are investing funds in the market. When retail investors are buying both indicator value and price change.

If the price leading the indicator, it is considered a non-conformation. Situation like that may be observed when the price rises faster than on-balance volume changes or if it falls before the indicator gets contracted. It usually defines the bottom for the bear market or the ceiling of the bull market.

A gradual rise of peaks and drops of the OBV indicator reveals an upward trend; in case they go down — downward trend is indicated. When the indicator is moving sideways, a trend is not defined.

If a trend was defined, it follows its direction until the next pivot point comes. An uptrend may be replaced with a downtrend and vice versa. In this case, reversal changes the trend to a doubtful one for three periods. If the doubtful trend persists for two periods only, no changes may be considered. The change of trend is usually followed with a break. This signals that a price change is about to occur.

Broken resistance signals to buy, a break of support level—to sell. It is recommended keeping positions open until the trend gets changed. If today's close is greater than yesterday's close then: Long positions in the euro can be seen after the decrease to the middle of the channel in the support range of 1. In case of a decline under the support Take profit at 1.

The next upside target is seen near This will likely cause some hesitation, but ultimately this sub-target should be broken for upside acceleration towards the next longer-term target at Support is now seen at This support will ideally be able to protect the downside for the expected rally higher towards Red wave iv is working its way sideways to slightly down.

We still think a dip to 1. Support is seen at 1. We continue to look for a possible The upward movement of the current week allowed to reach the weekly control zone of 1.

The test zone allows you to close part of the purchases, and the rest is transferred to a breakeven, as the continued growth remains a priority. Yesterday's growth made it possible to realize an upward model within the medium-term accumulation zone.

Today, the pair is trading within a weekly short-term period of 1. In the event of a Markets make a return on USD towards risky assets with the help of better information from emerging markets, while the disappointment of CPI from the US has covered the earlier optimism around the US economy. The stock market in Asia is in a reconstruction mode. When the European market opens, some economic data will be released such as Trade Balance. On the H1 chart, the level of 1.

Since the trend is above the pivot, the market is still in an uptrend. But, major support is seen at the level of 1. Furthermore, the trend is still showing strength above the moving average Thus, the market is indicating a bullish Is the dollar cheaper or is the euro still growing?

The task is not simple, because we need to unravel a fairly complex tangle of fundamental factors that affect the behavior of both the dollar and the euro. See also Forex tick charts Forex informers Currency converter Forex symbols.

See also InstaForex Cinema Festival. Forex charts and quotes. This different way of looking at volume is calculated by a relatively simple formula automatic in all current platforms:. The theory on which this indicator is based is that volume precedes price. OBV goes up when volume on up days is quicker than the volume on days with a drop. The indicator falls when the volume on days with a negative price is stronger. An OBV that is going up is a signal of positive volume pressure that can potentially lead to prices going up.

The opposite situation is a signal of prices going down — falling OBV shows negative pressure from the volume. In his papers discussing the indicator, Granville stated that he noticed that On Balance Volume moved before the price, but keep in mind that this is not always the case. It is instead the direction and the trend of the line that should be the main focus.

Breaks and rebounds have been found to have relevance and correlation with support and resistance levels for the instrument but again — not always! This approach takes into account the notion that volume does indeed precede price movement. To put On Balance Volume in a nutshell — you can look for a buy position when the OBV is rising at the same time as a drop or ranging price of an instrument and you can prepare for a sell position when the OBV is dropping while the price of the instrument is ranging or going up.

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BREAKING DOWN 'On-Balance Volume (OBV)'

On-balance volume (OBV) is a momentum indicator that uses volume flow to predict changes in stock price. Joseph Granville first developed the OBV metric in the s. Joseph Granville first developed the OBV metric in the s. The On Balance Volume Indicator In Depth The On Balance Volume indicator (OBV in short) was developed by Joe Granville in the s. Back in the days, it was a revolutionary indicator and today, many professional financial market traders use this leading indicator for analysis and trading. All trades based on the On-Balance Volume indicator require an increased stock for StopLoss, but probability of realizing its signals is high. Do not forget that indicator OBV (on balance volume) was created for the stock and commodity markets, which have real data on volume of positions.


The On Balance Volume of OBV for short is a technical indicator which combines volume and price. It was first developed by Joseph Granville and found its use widely in the stock and futures markets where volume is more significant. Learn everything you need to know about this indicator. On Balance Volume (OBV) is a volume-based indicator that aims to measure the pressure buyers and sellers exert on the markets. Its approach is to add volume on days that the price rises and subtract volume on days that the price drops.

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