OBV On Balance Volume: Volume Leads Price, Money Flow一目了然

What Is OBV?

OBV (On Balance Volume) was invented by Joseph Granville in 1963 and is the most classic volume indicator. Core philosophy: “Volume leads price” — volume changes precede price changes, and money flow patterns提前体现 in price trends.

OBV is a cumulative indicator: add volume on days when price rises, subtract volume on days when price falls. Long-term OBV trends reflect the net money inflow/outflow direction.

Calculation

• Today’s close > yesterday’s close → OBV = Previous OBV + Today’s volume
• Today’s close < yesterday’s close → OBV = Previous OBV - Today’s volume
• Today’s close = yesterday’s close → OBV = Previous OBV

OBV has no parameters — it’s simply cumulative volume with no period设置 needed.

Signal Interpretation

OBV Trend Direction

• OBV持续上升 → Money持续流入 (bullish)
• OBV持续下降 → Money持续流出 (bearish)
• OBV横盘 → Money inflow/outflow balanced (ranging)

OBV-Price Divergence

• Price new high but OBV没有 new high → Top divergence, rally lacks money backing
• Price new low but OBV没有 new low → Bottom divergence, money悄悄流入 during decline

Divergence is OBV’s most valuable signal — the essence of “volume leads price” is right here.

OBV Breakout

• OBV breaks above previous high → Money涌入 confirmed, price may follow upward
• OBV breaks below previous low → Money逃离 confirmed, price may follow downward

Practical Tips

1. OBV Bottom Divergence for Buying Dips

This is OBV’s most classic usage: price还在下跌 but OBV has already stopped declining or even开始上升 → Large money is quietly buying.

Practical rules:

• Price makes new low but OBV doesn’t → Mark for attention
• Wait for price decline confirmation (hammer candle or bullish engulfing with放大 volume) → Enter long
• Stop-loss below the price new low

On Gate.io ETH/USDT charts, OBV bottom divergence rebound成功率 is approximately 60-70%, a more可靠 dip-buying signal than pure price analysis.

2. OBV Top Divergence for Profit-Taking

When holding a profitable position, if price还在涨 but OBV is no longer rising → Large money开始撤离, trend即将反转.

Practical rules:

• Price new high but OBV没有 new high → Consider reducing position by 1/3
• Price继续涨 but OBV开始 declining → Reduce another 1/3
• OBV明显下降 → Take full profit

3. OBV Breakout Confirms Price Breakout

When price breaks through resistance, if OBV also simultaneously breaks above its previous high → High概率 of genuine breakout. Price breakout but OBV没有 breakout → Possibly false breakout.

Setting up OBV on Gate.io: Chart → Indicators → Search “OBV” → Add to sub-chart → No parameter设置, directly displays the cumulative line.

Common Mistakes

1. OBV absolute值大小 doesn’t matter — OBV的绝对值 has no significance (depends on starting point); only look at OBV’s trend direction and relative highs/lows
2. OBV isn’t precise inflow/outflow measurement — OBV只是 “add volume on up days, subtract on down days” — a simplified model, not actual money流量
3. Ranging period OBV噪声多 — During small price fluctuations, OBV反复加减, signals become混乱

Combinations with Other Indicators

Combination	Purpose
OBV + MACD	MACD看趋势, OBV确认 money direction
OBV + RSI	OBV bottom divergence + RSI oversold = dual dip-buying signal
OBV + EMA	EMA sets direction, OBV确认 money backing

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OBV’s core value is divergence signals — “volume leads price” isn’t empty talk. OBV bottom and top divergences genuinely lead price by 2-3 days in crypto实战. Price还在跌 but OBV已经 stopped declining → Large money is quietly buying the dip; price还在涨 but OBV已经 stopped rising → Large money is quietly撤离. OBV gives you 2-3 days more foresight than price alone.