OBV as an indicator

Discussion in 'Technical Analysis' started by dbTrader, Oct 29, 2003.

  1. To be honest, I read (and have become intrigued) by an article on eSignal because I recognized the name of the writer as one of the EliteTrader members who I most respect.

    Props to RAMOUTAR ....

    My question to our audience ... Does any one use the OBV to trade eMinis? If so, how?

    I hope to take responses now .....

  2. I read the artical yesterday, and tried to compare OBV with
    price action Intra day 1, 3, 5m . There were lot of wipsaw (i call it) and could end up losing lot of money if used that Indicator.

    May be able on daily chart as exampled with ramatour artical.
  3. PetaDollar

    PetaDollar Moderator

    In the past i've made some nice trades with the e-minis with the help of OBV. I posted some charts around here somewhere... try a search if you are interested...

    I would look for breaks in the OBV trend, or divergences between OBV and price. Worked best over a time period of at least a day or two. It's not magic, but I always preferred it over price-based indicators, since it uses additional information about the market. You might want to steal a page from NPP and take your signals from the big contract, if you are looking at the ES.
  4. I may well be mistaken, but is not OBV the indicator that both established and destroyed Joe Granville's reputation in the 1980s?
  5. In 1982 Granville's OBV flashed strong buy signals......as did the rest of his technical work......but poor old Joe ignorned the signals (as many of us do in our own work) and somehow got on a philosophical course on why the market was gonna crash.....

    I haven't looked at OBV in years....anyone familiar with Mark Leibovit's Volume Reversal? Used to be interesting stuff but haven't followed in a while.
  6. Thanks dbTrader. I'm glad you enjoyed the article. :)

  7. Hi NanaTrader,

    I couldn't agree with you more. Many indicators are rendered useless in the shortest timeframes. I have been able to use OBV with more success in the 60 min charts.

    However, as I mentioned earlier I use many of the indicators like OBV in the daily charts when I'm scanning. So with stocks like CA (which didnt pan out) RHAT and IGT (which did have continuation) OBV showed me that there was a strong transition on a momentum level.

    Momentum indicators help me narrow down the results of my scans to setups that have more "fuel" and "stronger hands".