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.
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.
