<h2>On-Balance Volume (OBV)</h2>
<p>On-Balance Volume (OBV) is a technical momentum indicator that uses volume flow to measure buying and selling pressure as a derivative of price action. It was developed by Joseph Granville in the 1960s and is used to confirm trends and identify potential reversals in the market.</p>

<h2>How It Works</h2>
<p>OBV is calculated by multiplying the daily volume by the direction of the price movement. If the price closes higher than the previous close, the volume is added to the OBV. If the price closes lower, the volume is subtracted. A positive OBV indicates buying pressure, while a negative OBV indicates selling pressure.</p>
<p>The OBV line can be used in conjunction with other technical indicators and chart patterns to provide a more comprehensive view of the market's direction. It is typically plotted as a line below the price chart, with a histogram version also available.</p>

<h2>Why It Matters for Traders</h2>
<p>OBV can help traders in several ways:</p>
<ul>
  <li><strong>Trend Confirmation</strong>: A rising OBV line indicates strong buying pressure, confirming an uptrend, while a falling OBV line indicates strong selling pressure, confirming a downtrend.</li>
  <li><strong>Potential Reversals</strong>: Divergences between price and OBV can signal potential trend reversals. For example, if the price is making new highs but the OBV is not, it could indicate waning buying pressure and a potential top.</li>
  <li><strong>Volume Validation</strong>: OBV can help validate other technical signals by providing volume context. For instance, a breakout with high OBV volume is more likely to be sustainable than one with low volume.</li>
</ul>

<h2>Example</h2>
<p>Let's consider an example using the MetaTrader 5 (MT5) platform. Add the OBV indicator to a EUR/USD chart. If the price is trending upwards with a rising OBV line, it confirms the uptrend. If the price makes a new high but the OBV line fails to do so, it could indicate a potential top and a sell signal.</p>

<h2>Key Takeaways</h2>
<ul>
  <li>OBV measures buying and selling pressure using volume flow.</li>
  <li>It can confirm trends and signal potential reversals.</li>
  <li>OBV is best used in conjunction with other technical indicators and chart patterns.</li>
  <li>It is available as a built-in indicator on the MT5 platform.</li>
</ul>