Normalized OBV with Smoothing Options

7 בפבר׳

This script is designed to help traders identify potential long and short entry points using a midline cross strategy based on a Normalized On-Balance Volume (OBV) indicator.

🔹 How It Works
OBV measures volume flow: This indicator tracks whether volume is increasing on up or down moves to help confirm trend strength.
Normalization for consistency: Instead of raw OBV values, this script normalizes OBV over a customizable lookback period, making it easier to compare across different assets and timeframes.
Smoothing for clarity: Users can apply different smoothing methods (SMA, EMA, RMA, or TEMA) to filter out noise and make signals clearer.
⚡ Trading Signals
Midline Cross (50) → Primary Signal for Entries
When OBV crosses above 50, it suggests increasing bullish momentum → Potential Long Entry
When OBV crosses below 50, it signals increasing bearish momentum → Potential Short Entry
Extreme Zones for Confirmation
Above 70 (Overbought): Indicates potential exhaustion of buying pressure.
Below 30 (Oversold): Signals potential exhaustion of selling pressure.
🎯 Why Use This?
Helps identify momentum shifts early.
Works as an additional filter for trend confirmation.
Useful for day traders, swing traders, and algorithmic strategies.

8 בפבר׳

הערות שחרור

Removed some glitchy highlighting of overbought and oversold.
Added a toggle to make indicator as if the chart was using Heikin-Ashi candles, or not.
Change default settings when adding to the chart to my preferred settings.

8 בפבר׳

הערות שחרור

Fixed some errors in the code.