This is On-Balance Volume recalculated to be an Oscillator, a Divergence hunter was added, also Pivot Points and Alerts.
On-Balance Volume, or OBV is considered a "leading indicator" - in contrast to a "lagging indicator" just as Moving Averages it does not show a confirmation what already happened, but it shows what can happen in the future. For example: The chart is climbing while the OBV oscillator is slowly declining, gets weaker and weaker, maybe even prints bearish divergences? That means that a reversal might be occurring soon. Leading indicators are best paired with Stop and Resistance Lines, general Trendlines, Fib Retracements etc...Your chart is approaching a very important Resistance Trendline but the OBV shows a very positive signal? That means there is a high probability that the Resistance is going to be pushed though and becomes Support in the future.
What are those circles? -These are Divergences. Red for Regular-Bearish. Orange for Hidden-Bearish. Green for Regular-Bullish. Aqua for Hidden-Bullish.
What are those triangles? - These are Pivots. They show when the OBV oscillator might reverse, this is important to know because many times the price action follows this move.
Please keep in mind that this indicator is a tool and not a strategy, do not blindly trade signals, do your own research first! Use this indicator in conjunction with other indicators to get multiple confirmations.
Hey @AdonisWerther, your script works very well.
I have promised myself to respect any bearish pivot on the chart, your script doesn't lie, very precisely when I'm doing swinging trading. =)
AdonisWerther
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@Mat_cl, nice, glad to hear that the script works as intended and actually helps 👍
lukricky
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can it also work on the lower time frame such as 5 mins or 15 mins please ?
harryorr
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Wow.... Looks awesome! Can we use this on any time frame?
AdonisWerther
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@harryorr, yes you can. On larger timeframes the diversions are going to be of much larger significance