Hey traders! Today, let’s dive into the world of the On-Balance Volume (OBV) indicator, specifically the extended version that you can use with MetaTrader 5. If you're looking to sharpen your trading strategies, this tool can be a game changer!
The OBV is a momentum indicator that leverages volume flow to forecast shifts in stock prices. Developed by Joseph Granville back in 1963 in his book Granville's New Key to Stock Market Profits, it’s been a staple in many traders' toolkits for decades.
However, the traditional OBV has its drawbacks. It tends to flip directions quite often and lacks definitive levels to act as clear “signals.” That's where the extended version comes into play. By integrating a sort of Donchian channels into the OBV, this version provides much-needed clarity and can help you identify potential trading signals more effectively.
Recommendations:
- Feel free to use it just like you would with the standard OBV.
- Keep an eye on color changes to spot potential breaks and retracements.
Incorporating the extended OBV into your trading toolkit could enhance your decision-making process. Happy trading!
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