✔️ Information reviewed and updated in December 2023 by Eduardo López
Having to calculate prices and volumes independently can be complex due to the large amount of data and dates to take into account. That is why OBV lines can be one of the most useful indicators if we want to save time.
What are OBV lines?
The OBV lines are responsible for grouping and adding the trading volumes of a given period of time when the closing price exceeds that of the day before. Afterwards, the trading volumes of a given price are subtracted from the time when the closing price is lower than the day before.
The use of the OBV lines allows us to see the price changes in relation to the volumes using both the closing prices and the day before as parameters. All in a single group of data thus facilitating its analysis.
Data to take into account about this indicator
If you see that there is a bullish divergence it is because the price curve reached a new low and the OBV managed to stay above the previous low. When the divergence is bearish, it is because the curve reached an all-time high and the OBV did not exceed the previous maximum.