Mnikolic Investment Technologies
intelligent investment technologies™
Mnikolic Investment Technologies
intelligent investment technologies™

TradeBuilder - Classic Edition v9 is a major release, adding On Balance Volume to the repertoire, bringing the total number of integrated indicators to 30. That's right, 30 unique indicators you can compound to create thousands of custom trading strategies. On Balance Volume provides superior filtering capabilities within trend-following setups.

Featured market: USD/JPY 1-minute chart, intraday trend-following configuration: Relative Strength Index, Moving Average Convergence Divergence (MACD), Parabolic Stop and Reverse (PSAR), On Balance Volume, Accelerator Oscillator.

New integrated indicator: On Balance Volume

In essence, On Balance Volume (OBV) is a cumulative, running total of market volume incorporating, both, positive (inflow) and negative (outflow) investor interest. The result is an oscillator that measures buying and selling pressure of a traded market. Since large component of OBV is reliant on tick volume, the indicator is best used as a filter within a broader strategy setup. Coupling OBV with one or more of TradeBuilder's price-derived indicators (RVI, RSI, Bollinger bands, PSAR, Moving Average Cross, etc.) allows traders to create a strategy that weighs price action with underlying volume. This weighing can help avoid unnecessary, unanchored price criss-crossing and thrusts associated with indecisive, ranging markets. Since OBV essentially measures supply/demand, the oscillator can be used to identify divergence between it and price action, indicating overbought or oversold conditions. Screenshot below shows one such example.

While EUR/USD H1 price makes lower lows the OBV oscillator makes higher lows. This is known as positive divergence, indicating that market may be oversold and ripe for a rally.

New parameters:

IndOnBalanceVolume: Setting this parameter to true activates On Balance Volume.
PriceOBV: Price type used in oscillator calculation.
UpLimitOBV: Level that OBV needs to cross over in order to qualify for a Long (Buy) signal. Unbounded range.
DownLimitOBV: Level that OBV line needs to cross under in order to qualify for a Short (Sell) signal. Unbounded range.

Since OBV oscillator is cumulative its vertical scale is unbounded, meaning it spans from positive to negative infinity. UpLimit/DownLimit values can be 0 or any value you feel is important. Positive values typically prevail during bullish markets and negative during bearish. For example, if OBV line is showing positive divergence from price action it could be indicating that market is oversold and preparing for an upward swing (see screenshot above). You could then use that OBV level for TradeBuilder crossovers in expectation of bullish trend.

OBV is best used in what Marko Nikolic calls Pierce-and-Reverse style strategies where you essentially break even while price ranges/consolidates and ride the trend when it picks up. It is advisable to use stop-loss or trailing stop orders with OBV-based strategies in case price and volume diverge significantly for an extended period of time.

Below are few more examples of OBV's application in TradeBuilder Classic:

USD/CAD 5-minute chart. Signals are compounding the following TradeBuilder components: Ichimoku Kinkō Hyō (ICH plus modifiers), Bollinger Bands (BBand), Average True Range (ATR), On Balance Volume (OBV), Accelerator Oscillator (ACC).

EUR/USD 30-minute chart. Signals are compounding the following TradeBuilder components: Double HMA Cross (HMA/HMA), Parabolic Stop-and-Reverse (PSAR), Average Directional Index (ADX), On Balance Volume (OBV), Accelerator Oscillator (ACC).

Expanded User Manual

The manual, now 36 pages in length, has been revised to cover OBV - see section 4.3.26.

More Information

Full details pertaining to TradeBuilder - Classic Edition v9, can be accessed through its dedicated section of the site.

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Existing Customers

If you are an existing TradeBuilder Classic customer, only ONE of the following TWO options applies:

  1. Customers who purchased TradeBuilder - Classic Edition v5.0 or higher qualify for a free upgrade.
Download latest version
  1. Customers who purchased TradeBuilder - Classic Edition v4.9 or older qualify for a discounted upgrade.
Upgrade now for $195

TradeBuilder - Classic Edition v9 is available for sale at the official Marko Nikolic Investment Research store. The current, promotional price is $495. Your purchase includes a free upgrade to Classic v10, slated for release in Q3 2015.

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