On balance volume!

Navraj

Newbie
6 0
I was wondering what the Default setting of the OBV indicator was? I think it is 14 but aren't too sure. And is there a charting platform where I can change the periods to another?

Regards Navraj
 

timsk

Legendary member
7,600 2,374
I was wondering what the Default setting of the OBV indicator was? I think it is 14 but aren't too sure. And is there a charting platform where I can change the periods to another?
Hi Navraj,
I've checked Achelis' Technical Analysis from A to Z and I can't see any mention of period settings. This is reflected in the indicator's parameters in MT4 which makes no such provision. I've done a (very) quick Google search on Joseph Granville (who's credited with developing OBV) - but can't see any mention of default settings.

If your charting software offers you the option to change the period settings, all I can suggest is that you experiment until you find something that works - whatever 'works' means for you!
Tim.
 

Lightning McQueen

Moderator
4,935 788
a look at how obv is calculated (mt4)

If today’s close is greater than yesterday’s close then: OBV(i) = OBV(i-1)+VOLUME(i)

If today’s close is less than yesterday’s close then: OBV(i) = OBV(i-1)-VOLUME(i)

If today’s close is equal to yesterday’s close then: OBV(i) = OBV(i-1)

Where:

OBV(i) — is the indicator value of the current period;
OBV(i-1) — is the indicator value of the previous period;
VOLUME(i) — is the volume of the current bar.

metastock explain their obv in a clear manner

On Balance Volume is calculated by adding the day's volume to a cumulative total when the security's price closes up, and subtracting the day's volume when the security's price closes down.

If today's close is greater than yesterday's close then:

OBV = Yesterday's OBV + Todays Volume

If today's close is less than yesterday's close then:

OBV = Yesterday's OBV - Todays Volume

If today's close is equal to yesterday's close then:

OBV = Yesterday's OBV
as can be seen in both examples the look back period is fixed, unless there is a variant of obv you are using that changes the look back period, there's nothing to change.

what is actually being looked at? and why is there a thought in regards to changing the period? just curious :)
 

Navraj

Newbie
6 0
Hi Navraj,
I've checked Achelis' Technical Analysis from A to Z and I can't see any mention of period settings. This is reflected in the indicator's parameters in MT4 which makes no such provision. I've done a (very) quick Google search on Joseph Granville (who's credited with developing OBV) - but can't see any mention of default settings.

If your charting software offers you the option to change the period settings, all I can suggest is that you experiment until you find something that works - whatever 'works' means for you!
Tim.

Thanks for the response Tim! (y)
 

Navraj

Newbie
6 0
a look at how obv is calculated (mt4)



metastock explain their obv in a clear manner


as can be seen in both examples the look back period is fixed, unless there is a variant of obv you are using that changes the look back period, there's nothing to change.

what is actually being looked at? and why is there a thought in regards to changing the period? just curious :)

OBV(i-1) — is the indicator value of the previous period, so correct me if I'm wrong but it only looks at the previous period. I want to change the formula to look at the last X periods. e.g 9. Its a new strategy which I think would work, PM me and maybe I can explain bit more.
 

Lightning McQueen

Moderator
4,935 788
OBV(i-1) — is the indicator value of the previous period, so correct me if I'm wrong but it only looks at the previous period. I want to change the formula to look at the last X periods. e.g 9. Its a new strategy which I think would work, PM me and maybe I can explain bit more.

as I understand it changing the look back period will only confuse the calculation as it is now, as a look back period of greater than the previous close is already calculated in the cumulative volume data. you'd have to completely rewrite obv, surely? :confused:

can you not just use a different volume based indicator to suit your requirement? one that can change periods for example.
 

Navraj

Newbie
6 0
as I understand it changing the look back period will only confuse the calculation as it is now, as a look back period of greater than the previous close is already calculated in the cumulative volume data. you'd have to completely rewrite obv, surely? :confused:

can you not just use a different volume based indicator to suit your requirement? one that can change periods for example.

yep you're absolutely right.:cry:. I think one way to re-write it would be to have a cumulative count of only 9 periods? ill PM you when I can with the strategy, and see if you can add you're experience to it.(y)
 
 
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