OBV (On-Balance Volume) — what it is and how to use it in trading
Definition
OBV (On-Balance Volume) is a cumulative indicator: on every candle, the whole bar's volume is added to the running total if the close rose, and subtracted if it fell. A candle with an unchanged close leaves the value unchanged.
How it works in the builder
The obv operand takes no parameters and returns a raw cumulative number in volume units — it is not normalized or bounded, and its absolute level depends on which candle the loaded history starts from.
What it looks like on the chart
Drawn as a separate panel as a stepped (staircase) line, not a smooth curve — each step corresponds to the volume of the next bar added to or subtracted from the running total.
Typical use
The absolute level of OBV is not very informative on its own — it is more often used to spot a divergence with price: if price makes a new low but OBV does not, that reads as fading selling pressure.
Common pitfalls
Because OBV is an unnormalized cumulative sum, comparing its level across different instruments — or even across different history windows of the same instrument — is meaningless; only the slope of the line matters, not the specific value.
This block is available in the strategy builder
137 no-code blocks — build an entry condition with this term and test it on history
Historical results do not guarantee future ones. The service is an informational and analytical tool, not an individual investment recommendation; trades are not executed.