I often think is a great indicator as trend direction and cannot lie.
However, I bumped into a few problems.
It is slow, doesn't show and often time it is prone to chop.
That's why I added ATR to the equation.
Original OBV calculation
src > 0? : +volume : src < 0? -volume
Modified OBV with ATR
src > 0 ? +volume * ( / atr) : src < 0? -volume * ( / atr)
I have used 2 for this modified OBV.
By adding ATR to the equation we can smooth out many erratic price movement. (Stop hunting)
Also, when price move slowly but steady, often prepping for a big move, this indicator will move faster.
In short, this indicator prevents you from being stop hunted and also provide great entry for a trending market.
Works well on BTCUSD XBTUSD , as well as other major liquid Pair.
Feel free to follow me on Twitter @Lancelot_Auger for more free Alpha.
Please acknowledge my effort by like and follow.
Save Hong Kong, the revolution of our times.