Some recent posts have been talking about OBV. I have been on a Divergence kick lately, so decided I wanted to write an OBV Divergence indicator. It turned out pretty well, so I am releasing it here.
This is for VIP Users Only. Please do not share it or post it elsewhere.
Divergence is when one thing is doing the opposite of another thing.
Here, if OBV is rising, yet the period price is falling, that is a divergence down. It will print a Magenta square.
If OBV is falling, yet the period price is rising, that is divergence up. It will print a Cyan diamond.
What does this mean? It means 'watch out'. When divergence is printing you should be very careful with your trades. Once divergence STOPS printing, it is important to see how the divergence was reconciled. Was the next print afterwards a DOWN movement, or an UP movement? In general, you should trade in that direction.
But, there are a few things to remember. The zero line here is important. Below zero typical means shorts only, above zero typically longs only. As always you should rely on more than one time frame to make trade decisions.
In the screen shots, the OBV Diver is the bottom panel. Attached is the indicator as well. I look forward to your input. (btw, the top panel shows the Wave indicator which I also just published).
For NT7 compatibility, there were 2 new parameters added to one of the DrawText() statements.
I added a compiler switch that will select the correct version of the statement of the DrawText method for either 6.5 or 7.
Indicator should now work in either version of Ninjatrader. However this zip package was created by NT7 so may not import into NT6.5. However, the previous version works fine in NT6.5 so that should not be a problem.
This indicator is a variant of OBV called PVT that is uses only a part of the volume in each bar for calculations, depending on how far price has moved. I find it to be more steady and accurate than OBV for determining overall trend - doesn't whipsaw up and down as much.
June 12th, 2016 11:31 AM dilbert618 Thank you Zondor
September 26th, 2015 08:07 AM PharmDoc Great work
February 12th, 2013 07:03 PM OpalDragon Epically awesome sir... Thank you very very much! Would love the option for the little diamonds to appear right on to
p of the bars on the chart...
with out any left scale - just diamonds on the chart
all I would need is to know that there is divergence it is so just diamonds appearing on top of the bar would be gr
eat -- but it is freakin awesome!
November 20th, 2010 03:42 AM MasterSeer Thanks So Much for your great contribution to my profitable trading!