Normalized OBV with Smoothing Options

7. Feb.

This script is designed to help traders identify potential long and short entry points using a midline cross strategy based on a Normalized On-Balance Volume (OBV) indicator.

🔹 How It Works
OBV measures volume flow: This indicator tracks whether volume is increasing on up or down moves to help confirm trend strength.
Normalization for consistency: Instead of raw OBV values, this script normalizes OBV over a customizable lookback period, making it easier to compare across different assets and timeframes.
Smoothing for clarity: Users can apply different smoothing methods (SMA, EMA, RMA, or TEMA) to filter out noise and make signals clearer.
⚡ Trading Signals
Midline Cross (50) → Primary Signal for Entries
When OBV crosses above 50, it suggests increasing bullish momentum → Potential Long Entry
When OBV crosses below 50, it signals increasing bearish momentum → Potential Short Entry
Extreme Zones for Confirmation
Above 70 (Overbought): Indicates potential exhaustion of buying pressure.
Below 30 (Oversold): Signals potential exhaustion of selling pressure.
🎯 Why Use This?
Helps identify momentum shifts early.
Works as an additional filter for trend confirmation.
Useful for day traders, swing traders, and algorithmic strategies.

8. Feb.

Versionshinweise

Removed some glitchy highlighting of overbought and oversold.
Added a toggle to make indicator as if the chart was using Heikin-Ashi candles, or not.
Change default settings when adding to the chart to my preferred settings.

8. Feb.

Versionshinweise

Fixed some errors in the code.