Anyone here use the OBV and ADL indicator together ?

Discussion in 'Technical Analysis' started by Onyx, Jan 22, 2018.

  1. Onyx

    Onyx

    Hi all,

    I was wondering if anyone uses the OBV and ADL indicator together in the same pan.

    I'm curious to learn the type of strategy that can be used when combining the two together ?

    Question part is when the two start to diverge such as the ADL is ranging/increasing while the OBV is falling.. Trying to understand this type of divergence its led me without much progress about it.

    Generally when the ADL is increasing its a sign of accumulation but if the OBV is falling it's a sign of distribution. If your using the two together isn't it a bit contradictory when it starts to diverge like that?

    Here is a chart of the divergence of the two indicators. https://www.tradingview.com/x/4EMQm4iL/

    OBV line is blue ADL line is yellow

    Rules:

    When there is a divergence between the ADL and OBV wsuch as the ADL increasing and the OBV decreasing is this a sign of a down trend of the coin/security?

    When the OBV increases above the ADL does it mean the coin/security is in an uptrend ?

    When you notice divergences with price and the ADL/OBV it's generally a sign of accumulation or distribution depending on the direction of the price. (This parts straight foreward for me).

    Just not to sure about rule No.1

    ADL - Accumulation Distribution Line OBV - On Balance Volume

    Hopefully I can get some clarification

    Thanks in advance
     
  2. themickey

    themickey

    I can comment on OBV, spent a good couple of years studying this one, as well as coding up some stuff re OBV and my end conclussion after thinking it works, is that it gives conflicting and false signals.
    There are some similarities with the Money Flow indicator to OBV, but again, it will lead you to a false impression.
    Just my experience.
    Re ADL, I never liked this too much from the get go.
    OBV was perhaps my chief holy grail indicator in earlier years, these days use zero indicators other than trend and S/R, with a tad volume thrown into the mix.
    If you were to call price bars an indicator, then that as well.
     
  3. tommcginnis

    tommcginnis

    FWIW, I could never get either of them to be at all predictive.
    (Or, for that matter, "explanatory.")

    Markets change, though, so I still try (pretty much) everybody out, once a year or so.
    Fiddle with those look-back parameters and see if you can get anything to work.
    And see if that can transfer to other contracts -- the most reliable are also the most robust.