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I'm watching the OBV (tradingview) on my tickers, and I'm puzzled as to why it shows completely different trends and signals depending on the time frame I pick.

I'm talking about forensics on a given period in the past. If I look at the 1 hour timeframe and the 4 hour timeframe it often shows different results:

1h:

1h

4h:

4h

As you can clearly see, the 4h TF shows a really bad trend while the 1h is rather positive, over the same period of time (since May 24)

Other indicators like RSI or even just the volume accumulation are more consistent over the same analysis. Why is that?

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Some indicators are more susceptible to “take away” effect of early data (early data points are removed from the calculation as new ones are added). An example of this would be moving averages or any indicator based on moving averages. A 10 period MA might be trending up whereas a 20 or 50 period MA might be trending down.

Because the RSI is a ratio, it eliminates the problem of needing large amounts of historical data and therefore is less susceptible to this “take away” effect.

0

Roll 2 6-sided dice twenty times, and put the results in a spreadsheet.

Let's say the results were:

7
6
2
9
11
5
2
9
5
5
4
4   
3
3
4
7
10
10
12
12

Now do a 'trend analysis' on the last 4 rolls. "Averaging 10, this baby is going up!".

Now do a 'trend analysis' on the last 10 rolls. "Averaging 6.9, this is a little below average, better hold!"

Now do a 'trend analysis' on the full 20 roll run. "Averaging just 6.5, SELL SELL SELL!"

The point is that you can easily adjust the data being looked at, to present the 'trend' or conclusion you want. It is trivial to find patterns in random data, and impute a causal relationship to project a false estimate of the future. Finding patterns is more or less mankind's greatest strength and also a modern weakness.

You are using questionable techniques to 'invest' [gamble] on a speculative asset class. You are looking for logic where none exists.

2
  • I don't think you're answering my question
    – Sebas
    Jun 4 at 18:17
  • The period is always the same in my observation, only the granularity of the indicator is changing. OBV is a volume aggregate and shouldn't be impacted - well at least that's my understanding and I'd like to be explained why I'm wrong.
    – Sebas
    Jun 4 at 18:27

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