What is OBVI? – How to Predict the Change in the Trend with It
On Balance Volume is the simple form of indicator but is effective one. Beginning from the arbitrary number, if the market ends up higher then the volume is added and if the market ends up at low then the volume is subtracted. In this way, one can predict which stocks are being built up and informs about the running total of the stocks. It also indicates the divergence, when the price of the stocks rises and the volume is increasing at slower rate or volume might have started falling.
By predicting the change in the trend, traders can earn fat profit. By implementing the trend change indicators, traders and technical analysts get alert immediately as the trend varies.
Trend following is an investment strategy, which depends on the technical analysis of the prices of the stocks rather than focusing on the fundamental issues of the company raising their stocks. The trend traders finds multiple of ways to obtain profit from trends. In the stock market, traders and technical analysts believe that the price of stocks fluctuates high and low with the change in the trend of the market. There are many indicators and oscillators defined to gauge the trend of the market. Apart from indicators and strategies several other factors plays an important role in trend trading like risk management and trading psychology.