Relative Volume and OBV Momentum Signals
Summary
This indicator combines relative volume with On Balance Volume (OBV) momentum to examine participation and buying or selling pressure. Relative volume compares current volume with a longer-term average, while an OBV momentum oscillator is smoothed with a linear regression. An optional acceleration band surrounds the oscillator, and a rolling correlation compares price with OBV.
Additional features include volume-weighted candle colors, optional Chaikin Money Flow, alerts for consecutive high-volume bars, and optional regular or hidden bullish and bearish divergences between price pivots and OBV momentum. These are configurable charting and alert tools rather than a tested trading system: the document provides no performance evidence, and smoothing and pivot confirmation can affect signal timing. The indicator does not specify entry, exit, or position-sizing rules.
Key ideas
- Relative volume compares current activity with a longer lookback average to flag unusually active bars.
- The OBV momentum oscillator measures changes in cumulative volume and can be displayed with a dynamic acceleration band.
- A rolling correlation shows whether price and OBV have moved together over the selected period.
- Optional divergence markers compare price swing highs or lows with OBV momentum pivots.
- Consecutive notable-volume bars can trigger alerts, but the script provides no trade management rules or performance validation.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.