Author

Topic: CLASH of INDICATORS: OBV vs. ACC./DIST. which one is right ATM? (Read 1532 times)

legendary
Activity: 1022
Merit: 1000


Still dont believe me? Lets turn up the graphical violence!





legendary
Activity: 1022
Merit: 1000
hero member
Activity: 686
Merit: 500
Shame on everything; regret nothing.
What is this divergence you speak of? They look like they are following each other very closely... ?

A/D is at an all time high. It is already 42% higher then at the top of the price's all time high of 266$/BTC.
Because A/D and price can be correlated with one another, so if A/D goes up over a continued amount of time, while price goes down (or does nothing) then this is a growing indicator for upwards correction.  The divergance at hand would in this context provoke an upwards correction to 284 $/BTC if A/D can be trusted right now (of course those are just rough estimates since this is no exact science but you get my point). 

OBV is basically the same thing with a little differently tweaked formula so most of the time the indicate the same thing for Bitcoin. But it is in contrast to A/D 20% lower then its all time high (NOTE: oth of OBV was at around 166$/BTC, not 266$/BTC!), which translated into $/BTC would put us to 130$/BTC.

This is a 120% divergance (130$ vs. 284$), so which indicator can be trusted more in this case?

::: dons bull horns :::
legendary
Activity: 1022
Merit: 1000
What is this divergence you speak of? They look like they are following each other very closely... ?

A/D is at an all time high. It is already 42% higher then at the top of the price's all time high of 266$/BTC.
Because A/D and price can be correlated with one another, so if A/D goes up over a continued amount of time, while price goes down (or does nothing) then this is a growing indicator for upwards correction.  The divergance at hand would in this context provoke an upwards correction to 284 $/BTC if A/D can be trusted right now (of course those are just rough estimates since this is no exact science but you get my point). 

OBV is basically the same thing with a little differently tweaked formula so most of the time the indicate the same thing for Bitcoin. But it is in contrast to A/D 20% lower then its all time high (NOTE: oth of OBV was at around 166$/BTC, not 266$/BTC!), which translated into $/BTC would put us to 130$/BTC.

This is a 120% divergance (130$ vs. 284$), so which indicator can be trusted more in this case?
legendary
Activity: 1904
Merit: 1002
What is this divergence you speak of? They look like they are following each other very closely... ?

A/D has maintained a stronger uptrend than OBV.
legendary
Activity: 1008
Merit: 1000
What is this divergence you speak of? They look like they are following each other very closely... ?
legendary
Activity: 1666
Merit: 1057
Marketing manager - GO MP
Honestly I can't imagine anybody using those indicators consistently and successful.
legendary
Activity: 1022
Merit: 1000


http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:accumulation_distrib


Discuss!


I: Notice the paragraph in the link provided where it is explained that OBV and A/D can diverge in case of opening/closing gaps between candles. In Bitcoin's 24/7 trading rhytm this is however not possible. So why are those indicators diverging that harshly and which one can be trusted right now?
Jump to: