On-Balance Volume (OBV) is a technical indicator of momentum used to make price predictions. It uses changes in volume as an indication of crowd sentiment and can be used to predict whether the market will have a bullish or bearish outcome. OBV has become one of the most popular indicators among traders, due to its ability to provide insight into future price movements based on current trading activity.The idea behind OBV is that when there are more buyers than sellers, it creates pressure for prices to rise; conversely, if there are more sellers than buyers then this puts downward pressure on prices. By tracking changes in volume over time, investors can get an idea about which direction the market may go next based on how much buying or selling activity is taking place at any given moment. This makes it possible for them to anticipate potential trends before they occur and take advantage of these opportunities accordingly .To calculate OBV you need two pieces of data: total daily volumes traded and closing prices for each day's trade session . The formula subtracts yesterday’s closing balance from today’s closing balance , adding it onto yesterday’s running total if today's close was higher than yesterday's close , subtracting from yesterdays running total if today's close was lower than yesterdays' close . This cumulative figure gives investors information about overall trend strength as well as where money flow stands relative between bulls & bears within a certain period - allowing them better understand what type action might follow next with respect towards their investments.
