OBV (On-Balance Volume): calculation and reading

OBV adds or subtracts volume according to each day’s close up or down, producing a cumulative volume line.

Updated：2026-11-08

Calculation

Accumulate starting from the first day:

• If today’s close is higher than the previous day’s: OBV adds today’s volume.
• If today’s close is lower than the previous day’s: OBV subtracts today’s volume.
• If the two closes are the same: OBV is unchanged.

The starting value is set to 0, so the absolute number of OBV has no meaning; what to look at is its direction.

How to read it

• A rising OBV means volume accumulated on up days is larger than on down days; a falling OBV means the opposite.
• You can put the direction of OBV side by side with the direction of price to see whether the two agree.

Limits

OBV decides whether to add or subtract only by whether the close rose or fell, regardless of the size of the move; a different starting day gives different values, so different stocks cannot be compared. It describes the volume-price relationship that has already happened and does not predict the future.

Where the idea comes from

OBV was introduced by Joseph Granville in 1963. This article explains it in our own words.

This article only explains the calculation and how to read a chart. It is not investment advice.