OBV Cryptocurrency Breakout Indicator

OBV Breakout Strategy is based on the popular stocks bitcoin trading strategy, where stock investors use volumes to predict bitcoin trading price direction, based on the concept "Volumes always precede bitcoin trading price", in bitcoin market, there is no central clearing house where bitcoin volumes are aggregated, so in bitcoin traders use a bitcoin indicator that will estimate the volumes. This bitcoin indicator is known as OBV - On Balance Volume.

Volume Precedes BTCUSD Price

Volumes always precede bitcoin trading price, this makes volumes a leading bitcoin indicator. Knowing how to interpret this volumes indicator helps bitcoin traders make better decisions when it comes to predicting where the btcusd trading market will be moving to next - volume indicators can be used by cryptocurrency traders to come up with a bitcoin breakout trading strategy.

When volume rises this shows that money is starting to flow into a bitcoin crypto. Because volumes will always precede the bitcoin trading price, the next thing is that the bitcoin trading price will then go up - Cryptocurrency Breakout Strategy Indicator. When the OBV indicator is going up it shows there are more buyers than sellers.

When the bitcoin volume falls it shows that money is starting to flow out of a bitcoin crypto. Because volumes will precede the bitcoin trading price, the next thing is that bitcoin trading price will then go down. When the OBV bitcoin indicator is going down it shows more trading volume is selling than buying.

Subsequently, when a downwards trend line of the OBV indicator is broken it shows that sellers are starting to take profit and close their sell orders.

Likewise, when the upwards trend line of the OBV indicator is broken it shows that buyers are starting to close their buy cryptocurrency trades and take their profits.

Because the On Balance Volume indicator will add direction to the bitcoin volume and form a general trend direction, a trader can compare the two - the bitcoin trading price trend direction and the OBV indicator trend direction. The direction of these two should correspond and move in the same direction but when there is a disconnect between these two - the bitcoin price & the indicator trend direction - then a trader should pay attention to know when to exit the bitcoin market or when to open a new bitcoin order depending on the bitcoin trade signal.

On Balance Volume is a bitcoin leading indicator & a trader using this indicator can avoid entering the btcusd trading market when it is too late. OBV Indicator is also a good bitcoin indicator to show when to take a profit early enough before the btcusd trading market trend reverses and takes away all your profit.

Example of this Strategy

OBV Crypto Breakout Indicator - Crypto Volume Breakout Strategy - On Balance Volume Indicator MetaTrader 4