In 1963, Joe Granville developed **On Balance Volume (OBV)**, which was one of the earliest and most popular indicators to measure positive and negative volume flow.

**OBV** uses the change in closing price from one interval to the next to value the volume as positive or negative. It does this by maintaining a moving cumulative total volume figure, which is adjusted by either adding the current intervals' volume to the cumulative amount if the interval closes higher than previously, or by subtracting the current volume from the cumulative amount if the interval closes lower.

The formula can be expressed as follows:

The change in the plotted **OBV** graph is relative to the direction of the price movement for the current interval, and its amplitude is determined by the volume (number) of trades.

The actual numbers used to plot the **OBV** are largely irrelevant, the important consideration is the trend that becomes apparent from the plot.

In normal circumstances the **OBV** line will tend to track the price chart, and a trend line drawn on the price chart will appear similar when drawn between the same dates on the **OBV** chart.

However, when the **OBV** line fails to move in the same general direction as the price chart, it is an indication that a price divergence may exist. This may result in a trend reversal.

The **On Balance Volume** chart is displayed in its own indicator window below the price chart.

There are no user defined parameters for the **OBV** calculation.

The **Style** selected for the plot can be one of the following: **Solid, Dashes, Dots, Points, Histogram** or **Step**.

The plot can be set to be inverted or logarithmic. When either of these settings is turned on, a small **Log** and/or **Inv** icon will appear in the OBV's scale (Y-axis).

Once the style is selected the **Color, Weighting** and **Visibility** can also be controlled from this page.

The **Scale's** display is controlled from the **Scale Settings** and **Scale Appearance** tabbed pages.

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