The OBV index was created by Joe Granville, an American investment analyst. This indicator predicts the stock price trend by counting the change trend of trading volume. The OBV takes the "N" shape as the fluctuation unit, and it is composed of many "N" waves to form the OBV curve. For the "N" wave that is higher than one wave, it is called the "rising tide", and the decline in the rising tide is called the "falling tide". The energy tide is to quantify the trading volume and make it into a trend line. With the stock price trend line, it can infer the market atmosphere from the price changes and the increase and decrease of trading volume. Its main theoretical basis is that the change of market price must be accompanied by the trading volume, and the fluctuation of stock price is closely related to the expansion or contraction of trading volume. Generally, the trading volume required for the stock price to rise is large; The volume is small when it falls.
The basic principle of OBV composition is based on the principle of ebb and flow. The direction of the tide can be determined by comparing the closing price of the day with that of yesterday.
If today's closing price is equal to yesterday's closing price, this tide belongs to the tide of many parties.
If today's closing price is less than yesterday's closing price, this tide belongs to the tide of the empty side.
It reflects the changes in the balance of power between the two sides, and where the spring tide will eventually go. This is the basic principle of OBV and the reason why OBV is called energy tide.
Use method of OBV energy tide:
The rise of share price and the decline of OBV line indicate that the buying is weak and the share price may fall back.
The decline of the stock price and the rise of the OBV line indicate that buying is brisk, and the stock price may stop falling and recover.
The OBV line rises slowly, indicating that the popularity of the buyer is gradually increasing, which is a buying signal.
The OBV line is more effective in determining the second peak of the double ceiling. When the stock price falls from the first peak of the double ceiling and then rises again, if the OBV line can rise synchronously with the stock price trend and the price and volume match, it can be held with confidence. On the contrary, when the stock price rises again, and the OBV line fails to coordinate synchronously, but it falls, the second peak may be formed, and the form of double peak is completed. At this time, it is a sell signal.
When the OBV line turns from a positive cumulative number to a negative number, it is a downward trend and the stocks held should be sold. Conversely, when the OBV line turns from a negative cumulative number to a positive number, you should buy stocks.
The biggest use of the OBV line is to observe when the stock market will break away from the market after consolidation and the future trend after breakthrough. The direction of change of the OBV line is an important reference index.
Precautions when using OBV energy tide:
The OBV moves roughly horizontally. When the time is more than one month, it means that the stock is in the consolidation period. Most impatient investors have left the market one after another. At this time, it is the quiet before the storm, and the big market may happen at any time.
OBV cannot be used alone, but must be used in combination with the stock price trend chart.
When there is "deviation" between the OBV curve and the stock price trend, it can be used to judge whether there is "collection" or "distribution" of chips by large institutional investors in the stock at present.
The OBV indicator is a good indicator for "catching villages", and any main force can hardly hide the OBV indicator.
After the stock price has fallen sharply, the 0BV value has obviously stopped falling and stabilized, and has moved laterally for more than a month at an approximate level, indicating that the market is in a long consolidation period, and most investors have left the market without patience. However, this time often indicates that the energy of short selling has gradually decreased, and the funds absorbed on bargain hunting has gradually increased, Big market may happen at any time. When the 0BV value can effectively climb upward, it indicates that the main force collection stage has been completed. When the OBV deviates from the top of the stock price, the upward trend has insufficient stamina, which is the "distribution" stage. When the OBV deviates from the bottom of the stock price, it is the stage of "collecting chips".
For the main force in the medium and long term, it is necessary to absorb as many chips as possible when the stock price is at the bottom, and then pull them to the top to distribute. At the stage of collecting chips at the bottom, it is inevitable that the stock price will rise due to the purchase of the dealer, and the trading volume will increase. At this time, in order to reduce the cost of raising funds, the dealer will push down the slightly rising share price and continue to raise funds at the bottom. Repeat until enough chips are sucked. This process is reflected in the OBV, that is, the stock price consolidates at the bottom, while the OBV rises in waves, forming a bottom deviation pattern.
be careful:
(1) OBV cannot be used alone, but must be used in combination with the stock price curve to play a role.
(2) The rise and fall of the OBV curve plays an important role in our further confirmation of the current stock price trend.
(3) The OBV rose at the same time as the stock price, and the upward trend was confirmed, which was the stage of "attracting goods". The OBV declines synchronously with the stock price, and the downward trend is confirmed as the "shipment" stage.
Meaning of OBV longitudinal height:
When the OBV line breaks away from 0-20% of the region and goes up sharply, it indicates that the main force has completed fundraising and entered the phase of knock on and pull up. At this time, the trading volume continues to expand. As long as the OBV curve and the stock price rise simultaneously, investors can boldly pursue the rise and buy.
When the OBV value is 60-80% of the regional narrow range, but the stock price has dropped sharply, or even dropped by more than 30%, it indicates that under the influence of the general trend or negative factors, small and medium-sized retail investors and the investors who follow the dealer have left the market in a panic, and the dealer can not be out because of too much funding, forming a situation where the dealer is trapped.
When the OBV line has risen to 80-100% of the area, its OBV curve has obviously formed the shape of V-shaped top, M-shaped top and round top, indicating that the strength of the bulls is about to be exhausted, and the dealer may "distribute" chips at any time. Therefore, once the OBV turns down or the "top deviation" appears, it should immediately clear the position. (Top financial and stock colleges: http://www.58188.com )
How can OBV indicators be used in actual combat?
Investors can learn the following methods: 30 minute OBV combined with the practical skills of MACD.
First, the 30 minute OBV parameter setting is 17. Second, this method is only suitable for the 30 minute K line diagram. Other cycles are not suitable. Attention, everyone.
A: 30 minute OBV usage: Jincha short-term buying point, dead fork short-term selling point. Stop loss in time after finding errors. As shown in the figure:
B: The MACD red column turns red again in 30 minutes. Cooperate with the OBV Golden Fork area for 30 minutes to find the short-term explosive point steadily. As shown in the figure:
As shown in the 30 minute chart above, the OBV Golden Fork at point A can be focused on. After the short-term breakthrough, adjust the OBV Golden Fork range area, and the MACD secondary red can be involved at the first time. You can use this method to practice. Of course, this is relatively stable. Under the condition that the market is relatively stable, radical investors can intervene in the first moment of OBV Golden Fork.. It depends on the market situation.
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