Understand and Use the On-Balance Volume (OBV) Function

The “On-Balance Volume” (OBV) function in MarketXLS helps you gauge buying and selling pressure by relating volume changes to price movements. By aggregating volume over time, OBV can reveal shifts in market sentiment and potential trend reversals. This Excel-based indicator is especially useful for traders who rely on volume flow to confirm price action or to spot divergences ahead of price movements.

Why Use This Function?

• Offers quick visual confirmation of positive or negative volume flow.
• Helps validate bullish or bearish trends by tying volume directly to price movement.
• Allows you to detect early signals of trend reversals when OBV diverges from price.
• Streamlines analysis by integrating seamlessly with Excel cells and arrays.
• Ideal for intraday, daily, or longer-term analysis depending on your data set.
• Can be combined with other technical indicators to refine trading strategies.

How to Use in Excel

=OnBalanceVolume(Symbol, [Optional Days = "14"])

1. Select an empty cell (or a range of cells if you want the entire OBV series).
2. Type the formula, referencing the ticker symbol or manually selecting your data ranges when prompted.
3. Press Enter (or Ctrl+Shift+Enter in older Excel versions for array formulas) to populate the OBV values.
4. MarketXLS will automatically fetch or prompt you for your Open, High, Low, Close, and Volume data ranges if needed.

When MultiMode is enabled, MarketXLS looks at the default OHLC and Volume ranges specified in your MarketXLS settings. Otherwise, MarketXLS prompts you to select the appropriate ranges for these data elements.

Parameters Explained

Example Usage

Basic Examples

1. Direct Symbol Reference

   • In a cell, enter:
     =OnBalanceVolume("AAPL")
   • MarketXLS prompts for OHLC and Volume data ranges (if MultiMode is OFF). Upon selection, Excel returns an array of OBV values.

2. Manually Selecting Data

   • Highlight four columns (Open, High, Low, Close) and one column for Volume from your sheet for at least 15 rows.
   • In the top-left cell of the destination range, type:
     =OnBalanceVolume("MSFT")
   • Press Enter (or Ctrl+Shift+Enter for an array). You’ll see the OBV values populate the cells.

Advanced Scenarios

1. Merging with Other Indicators

   • Combine the OBV array with a moving average or RSI to confirm breakout signals. Once the OBV array is in your worksheet, you can apply typical Excel formulas like =AVERAGE(...) for additional insights.

2. Longer Historical Data

   • If you have months or years of daily data, OBV can help confirm major trend shifts. Simply ensure your input ranges or MultiMode settings accommodate all the data points.

3. Intraday Analysis

   • If you track intraday volume (e.g., 5-minute bars) within Excel, OBV can be recalculated for each update. This lets you see real-time shifts in buying or selling pressure throughout the trading session.

Common Questions and Troubleshooting

• “Why am I getting an error or ‘Incorrect inputs’?”

• Your data range might be less than 15 rows. OBV needs a sufficient number of data points to return meaningful values.
• Ensure you have specifically four columns for OHLC data and one column for Volume.
• Check that you completed the prompt if MultiMode is OFF.

• “Why does the ‘Days’ parameter not change my results?”

• The current code calculates OBV for the entire data series. This is by design in this version of the function.

• “Why do I see ‘NA’ sometimes?”

• If volume data is missing or the ticker symbol is invalid, the function may return “NA.” Double-check the symbol or your data source.

By following these guidelines and examples, you can effectively incorporate OBV into your Excel workflow with MarketXLS. From spotting early breakout signals to confirming long-term trends, On-Balance Volume is a vital tool for any volume-focused trader. Adjust your data inputs as needed, and explore blending OBV with other indicators for more robust market insights.