OBV Moving-Average Crossovers for Directional Entries and Exits

Summary

This strategy uses On Balance Volume (OBV), which accumulates volume on rising closes and subtracts it on falling closes, as its sole trading signal. A long position begins when OBV crosses above a designated entry simple moving average and closes when OBV crosses below a separate exit average. Short trades reverse those crossover directions. Entry and exit averages are independently configurable, allowing trade initiation and position closure to respond at different speeds, and a direction setting selects long-only or short-only operation.

The accompanying explanation frames the system as a demonstration of OBV crossover mechanics, not a complete live-trading method. It suggests using OBV as confirmation alongside other strategy components or as an exit signal, and notes that OBV trend breaks and divergences are other possible analyses. The material offers no measured performance results or market-specific evaluation. The chosen average lengths and direction setting therefore need testing for the intended instrument and timeframe, and the standalone rules contain no separate trend filter or risk-based exit.

Key ideas

• OBV adds volume on up closes and subtracts it on down closes.
• Long entries and exits occur when OBV crosses separate entry and exit averages.
• Short entries and exits use the opposite crossover directions.
• Entry and exit average lengths can be tuned independently.
• The author presents OBV as a demonstration or supporting signal and provides no performance evidence.

Tags

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