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On Balance Volume (OBV)

The OBV is designed to measure the flow of volumes in and out of a financial instrument. It measures the total positive or negative volume of a session by adding the day's volumes to the previous OBV index value in case of a price increase, or subtracting them in case of a negative session.

Six sessions: closing prices, the volume of each session added on up days and subtracted on down days, and the On Balance Volume as a running total.
OBV adds the volume of up sessions and subtracts the volume of down sessions.

The indicator measures buying and selling pressure by assuming buying currents (incoming volumes) in bullish sessions, and waves of sales (outgoing volumes) in bearish days.

Formula: OBV = OBV+I

If [C0-C1] > 0, I = +V

If [C0-C1] < 0, I = -V

Where: I = OBV value of the previous period, C0 = current close, C1 = previous day's close.

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