Technical Analysis

On Balance Volume

Introduction

www.cmsfx.comThe On Balance Volume (OBV) indicator has been around for a long time. It was introduced in 1963 as a way to measure positive and negative money flow into securities. The concept behind its usefulness is that “volume precedes price” and therefore an understanding of volume is crucial to understanding the direction of price.

On Balance Volume attempts to add a sense of direction to the standard Volume indicator.

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