Day 4: Technical Indicators - VOL, OBV, and AVL
• Formal Question:
📊 What are VOL, OBV, and AVL in trading?
🎓
Three indicators that help you measure the bullish or bearish pressure behind price movements.
Because it's not enough to see how far it moves, but with what strength it does so.
🔹 VOL (Volume)
VOL or volume shows how many trades are made over a period.
Each bar represents the amount of assets bought or sold.
📈 Interpretation:
• High volume + rising price → strong bullish interest (solid trend).
• High volume + falling price → bearish pressure.
• Low volume → little market conviction (possible lateralization).
💡 Volume confirms trends. If the price rises without volume, the rise may be weak.
🔹 OBV (On Balance Volume)
OBV combines price and volume to measure accumulation or distribution.
✅ How it works:
• If the price rises, volume is added to OBV.
• If the price falls, volume is subtracted from OBV.
📊 Interpretation:
• OBV rising → accumulation (bullish dominating).
• OBV falling → distribution (bearish dominating).
- If the price rises but OBV does not, the trend may be losing strength.
💡 OBV is excellent for detecting differences between volume and price.
🔹 AVL (Average Volume)
AVL or Average Volume calculates the average volume over a period, like a moving average of volume.
📉 Interpretation:
• If current volume is above the average (AVL) → the movement has real strength.
• If it is below, the market is calm or indecisive.
💡 It serves to compare whether an increase in volume is truly significant or just noise.
-----
💣 Conclusion:
• VOL: shows market activity.
• OBV: measures if volume supports the trend.
• AVL: indicates if current volume is strong or weak compared to its average.
- Combining them allows you to confirm if a price movement has enough strength to continue or if a change is approaching.
