On-Balance Volume with Multiple MA Types

On-Balance Volume with Multiple MA Types

English Description

Overview
This is the first version of the "On-Balance Volume with Multiple MA Types" indicator designed to overlay directly on the price chart, a significant evolution from its previous iterations, which functioned solely as an oscillator in a separate window. The indicator calculates On-Balance Volume (OBV) and applies various smoothing methods to provide a clear view of volume dynamics in relation to price movements. It is pinned to the price scale for seamless integration with the chart.

Interpretation Recommendations

Price Pushing the OBV Line from Below: When the price chart pushes the OBV line upward and remains below it, this indicates rising volume, suggesting strong buying pressure.

Price Above the OBV Line: When the price chart is above the OBV line, it signals falling volume, indicating weakening momentum or selling pressure.

OBV Line Crossings: When the price crosses the OBV line, it represents a balance point in volume dynamics. The price level at the current crossing can be compared to the previous crossing to assess changes in market sentiment or momentum.

Moving Average Types
The indicator offers eight smoothing options for the OBV line, each with unique characteristics:

EMA (Exponential Moving Average): A weighted average that prioritizes recent data, providing a smooth yet responsive line.

DEMA (Double Exponential Moving Average): Uses two EMAs to reduce lag, offering faster response to volume changes.

HMA (Hull Moving Average): Combines weighted moving averages to minimize lag while maintaining smoothness.

WMA (Weighted Moving Average): Assigns more weight to recent data, balancing responsiveness and noise reduction.

TMA (Triangular Moving Average): A double-smoothed simple moving average, emphasizing central data points for smoother output.

VIDYA (Variable Index Dynamic Average): Adapts smoothing based on market volatility, using a CMO (Chande Momentum Oscillator) for dynamic weighting. Controlled by the VIDYA Alpha parameter (default: 0.2, range: 0–1), which adjusts sensitivity to volatility.

FRAMA (Fractal Adaptive Moving Average): Adjusts smoothing based on fractal dimensions of the OBV data, adapting to market conditions.

JMA (Jurik Moving Average): A proprietary adaptive average designed for minimal lag and high smoothness. Controlled by two parameters:

JMA Phase (default: 50, range: -100 to 100): Adjusts the balance between responsiveness and smoothness.

JMA Power (default: 1, range: 0.1+): Controls the strength of smoothing.

Input Parameters

OBV MA Length (default: 10): The lookback period for smoothing the OBV. Higher values produce smoother results but increase lag.

OBV MA Type (default: JMA): Selects the moving average type from the eight options listed above.

Line Width (default: 2): Thickness of the OBV line on the chart.

Bullish Color (default: Blue): Color of the OBV line when rising (indicating increasing volume).

Bearish Color (default: Red): Color of the OBV line when falling (indicating decreasing volume).

JMA Phase (default: 50): Adjusts the JMA’s responsiveness (used only when JMA is selected).

JMA Power (default: 1): Adjusts the JMA’s smoothing strength (used only when JMA is selected).

VIDYA Alpha (default: 0.2): Controls the sensitivity of VIDYA to market volatility (used only when VIDYA is selected).

How to Use

Add the indicator to your TradingView chart. It will overlay directly on the price chart, aligned with the price scale.

Adjust the OBV MA Type to select your preferred smoothing method based on your trading style (e.g., JMA for low lag, TMA for smoothness).

Modify the OBV MA Length to balance responsiveness and noise reduction. Shorter periods (e.g., 5–10) are better for short-term trading, while longer periods (e.g., 20–50) suit longer-term analysis.

Use the Bullish Color and Bearish Color to visually distinguish rising and falling volume trends.

For JMA or VIDYA, fine-tune the JMA Phase, JMA Power, or VIDYA Alpha to optimize the indicator for specific market conditions.

Interpret the OBV line in relation to price:

Watch for price pushing the OBV line upward (rising volume) or moving above it (falling volume).

Note crossings of the OBV line to identify balance points and compare with prior crossings to gauge momentum shifts.

Combine with other technical tools (e.g., support/resistance levels, trendlines) for a comprehensive trading strategy.

Notes

This indicator is designed to work on any timeframe and market, but its effectiveness depends on the chosen moving average type and parameters.

Experiment with different MA types and lengths to find the best fit for your trading approach.

The indicator is licensed under the Mozilla Public License 2.0 and copyrighted by TradingStrategyCourses © 2025.