What it does
On Balance Volume (OBV) is a running cumulative total of volume that adds the bar's full volume when price closes up and subtracts it when price closes down. The absolute value is meaningless; what matters is the direction and shape of the line, which is meant to reveal whether volume is flowing into or out of the instrument. The theory is that volume leads price, so OBV should move before price does.
Typeoscillatorseparate pane
How to add it
Click Indicators (ƒx) in the header.
Search “On Balance Volume” and click the result.
Hover its legend row and click the gear to open settings.
How traders use it
- Confirm trends: new price highs accompanied by new OBV highs show volume backing the move.
- Trade divergences: price making higher highs while OBV makes lower highs warns that the rally lacks volume support and may fail.
- Watch OBV breakouts: OBV pushing through its own resistance before price breaks out can front-run the price move.
- Apply trendlines and moving averages directly to OBV just as you would to price to define its trend objectively.
Inputs
| Input | Type | Default | Range / Options |
|---|---|---|---|
| Smoothing Line | select | SMA | SMA / EMA / WMA |
| Smoothing Length | number | 9 | 1–10000 |
Plots & styling
| Plot | Style | Default color |
|---|---|---|
| OBV | line | #2196F3 |
| Smoothed MA | line | #ff6d00 |
Every plot's color, line width and visibility can be changed on the Style tab. Precision, price-scale labels and status-line values are configurable at the bottom of the Style tab.
Tips
- Resize the pane by dragging its divider; collapse it from the legend row when you need the space back.
- Use Add to favorites in the legend menu; starred studies surface at the top of the picker.
- Reference levels (where the study has them) are editable — tune them to the instrument you're trading.
Watch out for
- A single high-volume bar that closes marginally down (or up) swings OBV heavily even if price barely moved, so the line can be distorted by one event.
- It needs genuine volume data and its signals are directional hints only, with no levels or targets.