Here is a quick run down of how to use the OBV, @Crypto_Core s favorite indicator I believe 😉. Below is the $ZRX chart. I chose this chart because I tweeted about the bearish divergence I spotted on RSI yesterday.
1) The OBV is a volume indicator typically used to confirm trend
1) The OBV is a volume indicator typically used to confirm trend
1) It can also be used as a leading indicator, i.e. if the OBV makes a new low but price action remains sideways, price is likely to follow the OBV.
2) OBV displays the flow of volume in and out, it is a running tally of volume calculated using the quantity of volume.
2) OBV displays the flow of volume in and out, it is a running tally of volume calculated using the quantity of volume.
3) Don't pay attention to the readings on the right side of the OBV, pay attention to how the OBV is behaving like you would price action.
4) Use the OBV in tandem with trend lines, since volume usually precedes price the OBV may break support or resistance before price does.
4) Use the OBV in tandem with trend lines, since volume usually precedes price the OBV may break support or resistance before price does.
And here is a chart of $ZRX showing how you can use the OBV to confirm down trends. This can be used as a leading indicator if you will, as you can see the OBV confirmed the reversal of $ZRX mid march.
$ETH example of how to use the OBV
HMMM Maybe OBV can be used as a leader indicator, EHHHHHHHH????
MEHHHH, I meant leading lol.
