Actually, OBV is an easy-to-understand tool but very practical for reading the market. I used to overlook it too because I thought it was just about volume trading, but once I started using it together with real price charts, I realized how much it can help.

What makes OBV interesting is that it doesn't just count volume; it also looks at when that volume comes in—whether during an uptrend or a downtrend. That’s what makes it a strong indicator. Joseph Granville created it back in 1963, believing that trading volume is the real driver of price movement, not just coincidence.

The way OBV works is very simple: if a candlestick closes higher than the previous one, the volume is added; if it closes lower, the volume is subtracted. If it stays the same, there’s no change. This accumulates volume in a directional way, allowing us to see how much big money is actually flowing in.

What I like about using OBV is when it signals a divergence from the price. For example, if the price hits a new high but OBV doesn’t make a new high, it’s a warning that the uptrend might be losing strength. I’ve been able to time market reversals pretty well with these signals.

To make OBV truly effective, it should be combined with other tools like Moving Averages or Bollinger Bands. For example, if the price continues to fall below the EMA 25 while OBV also declines, that confirms a strong downtrend. But if OBV stops making new lows and the price tries to break above the EMA, that’s a good entry point.

Another example is using OBV with Bollinger Bands. I’ve seen stocks hit the upper band but OBV doesn’t make a new high; then, when the price reverses and breaks below the 20 SMA with a big red candle, that’s a clear sell signal.

Many traders still don’t use OBV because they think it’s complicated or ineffective. But in reality, it’s one of the simplest and most effective indicators. If you haven’t tried OBV yet, it’s a tool that can give you a good sense of market momentum. Try getting familiar with it—it might change your trading approach.