OBV Moving-Average Crossovers for Trend Entries and Exits

Summary

This strategy uses On-Balance Volume (OBV) and separate moving-average rules to enter and exit long and short positions. OBV adds volume when price rises and subtracts it otherwise. The strategy smooths OBV with four simple moving averages: distinct entry and exit averages for each direction. A crossover above the long-entry average can open a long position, while a cross below the short-entry average can open a short; corresponding exit crossovers close positions. An optional direction setting can restrict trading to one side, and opposite entries close an existing position first.

The document presents the indicator logic, example parameter values, and a BTC/USDT futures backtest period, but reports no results. It frames OBV as a possible early trend signal while acknowledging that crossovers can be false and that the example lacks stop-loss and position-sizing rules. The author suggests testing other smoothing methods, adding trend filters, and combining volume-price signals. The strategy is presented as a simple demonstration or supporting signal, not as evidence of a validated standalone system.

Key ideas

• OBV accumulates volume according to the direction of price changes.
• Separate OBV moving averages govern long and short entries and exits.
• A direction filter can disable trading in one direction, and opposing signals can reverse exposure.
• The described rules do not include explicit stop-loss or position-sizing controls.
• No backtest performance results are supplied to establish the strategy's effectiveness.

Tags

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