Unit 2 · Understanding Indicators

OBV (On-Balance Volume)

Lesson 10 of 125 min5 exercises

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Following the Smart Money

OBV tracks cumulative buying and selling pressure. It adds volume on up days and subtracts on down days, helping identify accumulation and distribution.

OBV Signals

Rising OBV + Rising Price: Confirms uptrend
Falling OBV + Falling Price: Confirms downtrend
Rising OBV + Flat Price: Accumulation - breakout coming
Falling OBV + Flat Price: Distribution - breakdown coming

Watch out

OBV divergences are powerful signals. If price makes a new high but OBV doesn't, smart money may be selling into strength.