Forex Trading Handbook - For currency trading and forex education.

Forex News: 16:12:39 GMT: Global-View: Daily FX Calendar Outlook and Highlights 24 July 2008 - Late 15:32:14 GMT: FX Blog- Market Snapshot N.Y. Mid-Session 24 July 2008 14:56:18 GMT: Chart of the Day - 7/24/2008 - GBP/USD 11:49:31 GMT: FX Thoughts for the day - Evening - 24-July-2008....1147 GMT 11:21:39 GMT: Forex Blog - European Market Update: European Sentiment Shows Signs of Decay 11:12:52 GMT: FOREX NEWS-Euro hits 2-week low on Ifo but downside capped .................... ..............

....Click image for CitiFXpro.com.................... >>>>>>....July 25-26 LAS VEGAS - Streetdice - Conference for Forex Affiliates Click Here for Details <<<<<< ..............READ ABOUT THE GVI FOREX NO COST OPTION........ ..............

...Click image.................................... .......Career Builders Job Directory CLICK for Jobs...... ........SPECIAL OFFER!... Thomson TFN FOREX NEWS only $300/yr via Paypal....... Forex Job Opportunity!... CLICK for Details.......................................... ..............

...Click image.................................... >>> Check out NEW Forex Signals Service - - FX-Forecaster <<<............................................................................................................................................................................................................................. WebTicker by Mioplanet www.mioplanet.com

Search In...

Starts with

Ends with

Full Word

Categories

Basics of Trading Course
Module 1: Technical Analysis Basics
Module 2: Chart Patterns
Module 3: Technical Indicators
Module 4: Candlestick Chart Formations
Module 5: The Psychology of Trading
Module 6: Money Management
Module 7: Position Sizing
Module 8: Intro to Fundamental Analysis
Module 9: Economic Releases that Move the Markets
Module 9a: Pulling It All Together
Forex Trading Course
Module 1: The Basics of Forex Trading
Module 2: The Logistics of Forex Trading
Module 3: The Logistics of Forex Trading Part 2
Module 4: What Moves the Forex Market
Module 5: Trading the US Dollar
Module 6: Trading the Euro
Module 7: Trading the Japanese Yen
Currency Futures
Market Terminology
Options
Posting a Forum Chart
Trade Execution
Trading Fundamentals
Economic Indicators
Flows/Central Banks
Trading Technicals
Charting
Trading Techniques

Found In....

Category Name: Trading Technicals

» Sub-Category Name: Charting

On Balance Volume

By: vss2000.com

On Balance Volume ( OBV )

On Balance Volume (OBV) is a momentum indicator that relates volume to price change. Joseph Granville presented the idea that volume will precede price in his 1963 book, New Key to Stock Market Profits.

On Balance Volume keeps a running total of volume flowing into or out of a security. When the security closes higher than the previous close, all of the day's volume is considered up-volume. A close lower than the previous day's results in all of the day's volume considered down-volume. A rising OBV is defined as a sign of smart money flowing into a security. As the public then moves into the security, both the security and the OBV will surge ahead. If price movement precedes OBV movement, Granville calls this a "non-confirmation." Non-confirmations can occur at bull market tops, when the security rises before/without the OBV or at bear market bottoms when the security falls before/without the OBV.

When the security's price closes up, the day's OBV is created by adding the day's volume to the cumulative total. Subtract the day's volume from the cumulative total when the price closes down.

Look for rising trends (when each new peak is higher than the previous peak and each new trough is higher than the previous trough) or falling trends (when each successive peak is lower than the previous peak and each successive trough is lower than the previous trough) to signal a "breakout." OBV breakouts normally precede price breakouts and investors should buy long on OBV upside breakouts and sell short when on OBV downside breakouts. An OBV is moving sideways is in a doubtful trend and implies a hold until the trend changes.

It is the direction of the OBV line (its trend) that is important and not the actual numbers themselves as actual values will differ depending on how far back you are charting.

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.