Heikin-Ashi OBV with Traffic-Light EMA Trend Signals

Summary

This indicator adapts on-balance volume by deciding whether to add, subtract, or leave volume unchanged according to the direction of Heikin-Ashi closes. It then compares the cumulative series with fast, medium, and slow exponential moving averages, using colors and fills to make relative direction and trend changes easier to see. A Donchian-style baseline, calculated as the midpoint of the recent OBV high and low, is also plotted optionally.

The adjustable defaults use EMA lengths of 5, 9, and 14, with a baseline length of 26. The background can retain a bullish or bearish directional color when OBV and the fast EMA are both on the same side of the slow EMA. The document explains the indicator’s construction but gives no market tests, performance results, or trading rules. Its colors are visual signals derived from volume and price data; they do not establish that a trend will continue or specify entries, exits, or risk controls.

Key ideas

• The indicator accumulates signed volume based on whether the Heikin-Ashi close rises, falls, or stays unchanged.
• Three exponential moving averages show fast, medium, and slow trends in the OBV series.
• OBV and its slow average are colored according to their relative position.
• An optional Donchian midpoint provides a baseline for the OBV series.
• The document describes calculations and display settings but provides no performance evidence or complete trading plan.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.