OBV with Auto Fibonacci Levels
Aug 3, 2019
The OBV with Auto Fibonacci Levels indicator combines On-Balance Volume with dynamic Fibonacci retracement levels and a Hull Moving Average (HMA) to help traders identify volume-based trend shifts and key institutional liquidity zones.
Usage
The indicator can be used to gauge the strength of a trend and identify potential reversal points based on cumulative volume flow.
- Trend Bias: The On-Balance Volume (OBV) line is overlaid with a Hull Moving Average (HMA). When the HMA is rising (colored green), it suggests a bullish volume bias. When the HMA is falling (colored red), it suggests a bearish volume bias.
- Fibonacci Retracements: The tool automatically calculates the highest and lowest OBV points over a user-defined lookback period. It then projects Fibonacci levels (0.236, 0.382, 0.5, 0.618, 0.786) across this range. Traders can use these levels as support or resistance for the OBV line, signaling when volume accumulation or distribution has reached significant historical thresholds.
- Heikin Ashi Integration: Users can choose to calculate the OBV based on Heikin Ashi price data, which can help filter out noise and provide a smoother representation of volume trends.
Details
The script functions by calculating the cumulative On-Balance Volume and then applying a Hull Moving Average to that series. The HMA is favored for its ability to reduce lag while maintaining smoothness. The Fibonacci levels are calculated dynamically based on the highest and lowest values of the OBV within the specified lookback window, providing a relative context for current volume levels compared to recent history.
Settings
- Trend: Sets the length for the Hull Moving Average (HMA) used to determine the OBV trend bias.
- Lookback: Determines the number of bars used to calculate the highest and lowest OBV values for the Fibonacci level projections.
- Heikin Ashi?: When enabled, the indicator calculates the OBV using Heikin Ashi candle close prices instead of standard candle closes.
FAQ
How do I use the OBV with Auto Fibonacci Levels?
You can use it to confirm price breakouts with volume or to identify overextended volume movements when the OBV reaches the upper or lower Fibonacci levels.
What timeframes are best for this tool?
While the script is versatile, it is often utilized on higher timeframes like H4 or Daily to identify significant swing trading trends and volume accumulation phases.
How can I get access to the OBV with Auto Fibonacci Levels?
You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.
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