On Balance Volume Surrogate is an indicator created in March 2015 by developer Stanislav Korotky. This indicator is an edition of the ‘On-Balance Volume’ indicator that is based upon pseudo-real emulated volumes of tick volumes. It calculates an estimate close to the actual distribution of the trading volumes of Forex instruments (where only tick volumes are available) and then applies the conventional OBV formula to them.
Overview
The volumes are calculated by the same algorithm that is used in the True surrogate volume indicator. The indicator itself is not necessary but can be used as a reference. The main parameters of On Balance Volume Surrogate are as follows:
- Ma fast – mean rapid movement period (EMA), default – 3; if set to 0, the mean is not calculated
- Ma slow – mean slow movement period (EMA), default – 7; if set to 0, the mean is not calculated
Alert on Macross – alert switch for a crossover of moving stockings, by default – false (alert is disabled); alert is signaled only once per bar; alert message format: “Obvsurrogate [Symbol] [Timeframe] UP/DOWN cross @ [Time]”
Completed bars – an option that controls how the crossover of moving stockings is marked: in the last bar or in the previous bar (Completed bars is true); by default – true, so alerts can be generated at the opening of the bar only; note, that a signal on the downhill turn is not necessarily followed by a signal on the upturn (or vice versa) – in some cases when the moving averages fluctuate near the other, you can get several successive signals (in different bars) in the same direction you should consider this as a signal confirmation.
Visualization
The indicator shows 3 lines:
- Green thickness – cumulative volumes according to the OBV formula
- Thin red – fast-moving medium
- Thin yellow – slow-moving medium
Trading with On Balance Volume Surrogate
The indicator should be used for trade in the same way as conventional OBV is used:
-By means of passing signals of moving averages;
-Divergence/convergence between OBV and price; if their directions contradict – a reversal is expected (the current trend is about to change);
-The constant movement of OBV and price; confirms the current trend.
Service Cost
The On Balance Volume Surrogate indicator is for sale on the MQL market at a price of 12.50 USD, a very affordable price if we really find the indicator useful. Even with the low purchase price, a free demo is available for testing purposes.
Conclusion
In summary, we are talking about an indicator based on the volume but with the addition of 2 moving average that will also give signals of purchase or sale, in short, a trend indicator that is helped by the values of the volume for the input decisions.
Apparently, from the comments of some users, it is in M15 the time frame that gives the best results to this indicator. It is a simple indicator to use and understand, making it suitable for beginner traders.
The few valuations we have found are positive, so it seems that this indicator can be of help for our trading. Anyway, the best way to find out is to download the demo version to test the indicator and see if it fits our trading style.