OBV Divergence

OBV Divergence watches for the moments when price and cumulative volume stop telling the same story. It plots On-Balance Volume — the running total adding a bar's volume on up closes and subtracting it on down closes — and compares its swings against price swings at confirmed pivots, flagging every OBV divergence with paired lines in the pane and on the price chart. A higher price high met by a lower OBV high shows an advance drawing thinner volume backing; a price low undercutting the prior one while OBV holds higher shows sellers losing force.

How to Trade the OBV Divergence?

• Bear label: price higher high, OBV lower high — a warning over the advance, traded once price structure breaks rather than on the label alone.
• Bull label: price lower low, OBV higher low — the accumulation-flavored counterpart, same discipline.
• Hidden divergences (optional, dashed): price holding a higher low while OBV prints a fresh low, and the bearish inverse — continuation reads rather than reversals.
• Audit both panes: the paired lines show exactly which two swings produced each signal, a habit worth keeping across the volume tools.

All four divergence types carry dedicated alerts.

OBV Divergence Settings

• Left Bars (default 5) and Right Bars (default 5): bars required on each side of a price swing; the right side sets the confirmation delay.
• Max Bars Between Swings (default 60): swings further apart are not treated as part of the same move and are never compared.
• Detect Hidden Divergences (default off): add the continuation variants, a comparison more familiar from oscillators than from OBV.
• Style inputs toggle the OBV-pane lines, the price-chart lines, and the signal labels, plus the bullish, bearish, and OBV line colors.

Frequently Asked Questions

How is this different from a plain OBV plot?

The On-Balance Volume line only shows the running total; spotting disagreements is left to the eye. This build formalizes the comparison — confirmed pivots, a maximum gap, explicit regular and hidden definitions — so a divergence becomes a discrete, alertable event.

Does it repaint?

Drawn signals do not. A swing needs 5 bars of right-hand confirmation before it exists, so divergences appear with that delay — the trade-off for comparisons that stay put once made.

Why do some divergences fail?

Because a bar's entire volume is signed by its close direction, one huge print that closes marginally lower can bend the line and produce a disagreement with no economic meaning. Divergences can also repeat across several new extremes before price finally turns — hence the demand for confirmation.