OBV adds volume when the close is:

Higher than the previous close. Up closes add volume.

OBV divergence can warn of:

A weakening trend. Volume is not confirming.

Real volume data. Real volume is better.

Courses / Volatility and Volume Indicators

On-Balance Volume (OBV)

A running total that adds volume on up days and subtracts on down days.

OBV adds the day volume when the close is higher than the previous close and subtracts it when lower. The line shows whether volume is flowing into or out of the market.

A rising OBV with rising price confirms a trend. OBV making new highs before price can hint at a breakout. A falling OBV while price rises is a bearish divergence.

OBV works best on instruments with real volume data.

Key takeaways

Running total of signed volume
Rising OBV confirms uptrends
Divergence can warn of weakness

Quiz

OBV adds volume when the close is: Answer: Higher than the previous close. Up closes add volume.
OBV divergence can warn of: Answer: A weakening trend. Volume is not confirming.
OBV works best with: Answer: Real volume data. Real volume is better.

Educational content, not financial advice.