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EUR/USD Ex.– End of Feb |
Example of EUR/USD: A Look at March using OBV Trendlines and Price Trendlines.
This example will show how to use the On Balance Volume indicator by drawing and applying analysis of trend lines. Trend lines make it easier to follow trends as they show levels of support and resistance that can be useful in examining the pace of the trend. Trend lines are one of easiest tools to use for technical analysis. This example shows how to use trend lines with On Balance Volume to make it act as a leading indicator. The buy and sell signals given on the On Balance Volume panel can come sooner than the signals from similar trendlines established on the price chart. Let us begin.
- Hopefully the analysis is correct and one is able to get a short position in the middle of March 6th, on the circled candle. The mean of that candle is 1.2025 and that will be the rate of the position. OBV turns up after the position is opened but bounces off of the trendline (support turned resistance) and heads down. The upturn on OBV comes as price bounced of its trendline in a slight correction. Both upturns last only 1 session.
- Right afterwards the price trendline is broken giving the trader confirmation of the above sell action.
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