Here's a description by Tom Bierovic. Given the probs with volume measurement in forex, this might be very useful tool. Can someone make it?

On Balance True Range by Thomas A. Bierovic

On-Balance True Range (OBTR) is my attempt to improve on the old On-Balance Volume study (OBV). In OBV you add today's volume to a running total of volume if the market closes higher than yesterday, and you subtract today's volume from a running total of volume if the market closes lower than yesterday. The OBV line confirms the current trend by making new highs or new lows along with prices, or it warns of a possible trend reversal by diverging from price action.

Since there is a high statistical correlation between volume and True Range, I simply substitute True Range for volume in the OBV study. True Range is usually just the difference between a period's high and low. However, if the previous close is below the current period's low, True Range is the difference between the current high and the previous close. If the previous close is above the current high, True Range is the difference between the previous close and the current low. In other words, True Range fills in the gaps. On-Balance True Range is an improvement to On-Balance Volume because you donŐt have to rely on tick volume or wait until tomorrow to obtain actual volume figures and because OBTR more accurately reflects a market's real activity when there is a gap.

To calculate OBTR, just add the current period's True Range to a runningtotal of True Ranges if the market closes higher than the previous period'sclose or subtract the current period's True Range from a running total ofTrue Ranges if the market closes lower than the previous period's close.

My intent in using this it to slap a MA on it and confirm divergent turning points. It can work pretty well...

Forex market is not centralized, there is no way to see the real volume. The volume your MT4 shows is not anywhere near the correct number.

I use ECN myself and see the level II style market depth and that still is not the true volume (and I know that).

The only way to get some visibility is to track volumes from currency futures contracts (which are centralized) but that's quite a different story..

In other words, it's not worth using volume indicators in forex.

Hi - that's why on balance true range could be a useful alternative.

This is from VT forum, VT indicator attached. Can someone port it to MT4?

I'll show you how to use it... :-)


Integrating oscillators and OBTR creates a simple yet powerful trading method. My On-Balance True Range study provides reliable trend-following confirmation of oscillator divergence signals in all time frames from intraday charts to the daily and weekly charts."

(Note: The OBTR Cross is best used as a Screen for one's signals and not for signals itself as it also shows divergence well. Take signals from other indicators if OBTR Cross confirms and watch for price reversals following divergence.)

Attached Images

obtr.jpg (299.6 KB, 419 views)

Trying again to attach vtscr file from VT... the blue section of histogram is longer term true range, the green shorter term.

Attached Files

on_balance_true_range_histo.rar (2.1 KB, 98 views)

Very interesting. I see that volume actually plays no part in the calculation being wholly substituted for ATR. Nice work Thruline.

yes would be great if someone could do this....but maybe all are too busy..................Thruline can you explain more your way you want to use it............