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Consolidation zones drawn on On-Balance Volume: see when volume is undecided, and when it commits.
Price can break a level while the volume behind it is still undecided. OBV Consolidation Zones draws a zone around On-Balance Volume while it moves sideways, then tells you when volume leaves that range and which way. Put it beside your price breakouts: when price breaks, did volume break with it?
Opens the indicator on TradingView.
Each part, what it shows and why it is there.
On-Balance Volume is a running total of volume: added on up closes, taken away on down closes. When it moves sideways, a zone is drawn around it. What counts as sideways is judged against how OBV has behaved lately on that market and timeframe, so there is no width to set. A zone has to last a while before it is drawn, so a short pause never becomes a range.
When OBV leaves the zone, the break is provisional at first. If OBV comes back inside soon after, it was a failed break: the zone reopens and widens to take in the poke, and nothing is reported as a break. If OBV stays out, or moves far enough away, the break is confirmed, up or down. Breaks only confirm on a closed bar.
You choose how the next zone relates to the one that just broke. By default the next zone starts only once it is clear of the old one, so every break on the chart stays a real break. Or the two can merge into one wider block, to see a whole accumulation area at once. Each zone also draws a dashed midline, where the range balanced.
An OBV break on its own is not a trade. Its place is next to a price breakout you already have. When price breaks a level and OBV breaks its zone the same way, the move has volume behind it. When price breaks while OBV is still inside its zone, the move has no volume commitment yet. When the two break opposite ways, volume disagrees with price.
Divergence is volume disagreeing with price at its turns. The tool marks regular and hidden divergence between OBV and price, bullish and bearish. A line joins the two OBV turns being compared, tagged Bull or Bear, and H for hidden. A mark appears a few bars after the turn, drawn back at the turn itself: that is how a turn is confirmed, not repainting.
A faint moving average of OBV sits beside it as a reference, with optional bands that show when OBV is stretched against its own recent range. The OBV line is coloured by direction: teal rising, red falling. Inside a sideways stretch, OBV crosses its average again and again and most crosses are noise. The zone turns that stretch into one event.
No. It tells you volume has left its range and which way. Use it to check a price breakout you already have: did volume break with it?
In a sideways stretch, OBV crosses its own average again and again, and each cross looks like a turn. A range is different: while OBV stays inside, nothing has happened; when it leaves decisively, something has.
That is a failed break. The zone widens to take it in and nothing is reported as a break. A poke that fails is part of the range, not its end.
Yes, but most spot forex and CFD feeds, gold included, send tick volume, which counts price updates rather than traded size and differs between brokers. Zones there show activity, not money. On futures and stocks, OBV reads real volume.
OBV Consolidation Zones is an analysis tool, not investment advice. Charts and examples are illustrations.