On Balance Volume (OBV) indicators Flashcards
1
Q
If the price closes higher what do we do to the OBV
A
We add that day’s volume to the previous OBV to find the current OBV
2
Q
If the price closes lower what do we do to the OBV
A
We subtract that day’s volume from the previous OBV to find the current OBV
3
Q
What does OBV distinguish between
A
Between institutional and retail investors
4
Q
Why is OBV quite reliable
A
if you can use it right then you can see how the volume is shifting before the asset prices actually change significantly
5
Q
Why are OBVs and MAs quite good together
A
As OBVs are forward indicators and MAs are lagging indicators so they balance each other out
6
Q
Name a warning about using OBVs
A
A single day with a huge amount of volume can throw the indicator off for a while
