Why Volume Matters
Price tells you what happened. Volume tells you how much conviction was behind it. A breakout on high volume is far more likely to sustain than one on thin volume. Volume indicators quantify this relationship, giving your algorithms an additional confirmation layer.
The TickAtlas API provides two key volume indicators: On-Balance Volume (OBV) for cumulative volume flow, and Money Flow Index (MFI) for a volume-weighted momentum oscillator.
On-Balance Volume (OBV)
OBV was introduced by Joe Granville in 1963. The logic is simple: on up days, the full volume is added to a running total. On down days, the full volume is subtracted. The direction of OBV, not its absolute value, is what matters.
If Close > Previous Close:
OBV = Previous OBV + Volume
If Close < Previous Close:
OBV = Previous OBV - Volume
If Close == Previous Close:
OBV = Previous OBVOBV Rising + Price Rising
Healthy uptrend confirmed by volume. Stay long.
OBV Falling + Price Rising
Bearish divergence. The rally lacks conviction and may reverse.
Fetching OBV via API
curl -H "X-API-Key: YOUR_API_KEY" \
"https://tickatlas.com/v1/indicator?symbol=XAUUSD&indicator=OBV&timeframe=H4"Response:
{
"success": true,
"data": {
"symbol": "XAUUSD",
"timeframe": "H4",
"indicator": "OBV",
"value": 1548230,
"bid": 2190.50,
"ask": 2190.80,
"updated_at": 1787229614,
"server_time": "2026-08-20T12:40:14+00:00"
}
}Money Flow Index (MFI)
MFI is often called the "volume-weighted RSI." It uses both price and volume to measure buying and selling pressure. Like RSI, it oscillates between 0 and 100, with readings above 80 indicating overbought conditions and below 20 indicating oversold.
Typical Price = (High + Low + Close) / 3
Raw Money Flow = Typical Price * Volume
If Typical Price > Previous Typical Price:
Positive Money Flow += Raw Money Flow
Else:
Negative Money Flow += Raw Money Flow
Money Flow Ratio = Positive MF / Negative MF (over 14 periods)
MFI = 100 - (100 / (1 + Money Flow Ratio))curl -H "X-API-Key: YOUR_API_KEY" \
"https://tickatlas.com/v1/indicator?symbol=XAUUSD&indicator=MFI_14&timeframe=H4"{
"success": true,
"data": {
"symbol": "XAUUSD",
"timeframe": "H4",
"indicator": "MFI_14",
"value": 72.34,
"bid": 2190.50,
"ask": 2190.80,
"updated_at": 1787229614,
"server_time": "2026-08-20T12:40:14+00:00"
}
}Python: Volume Confirmation System
Here is a complete system that uses OBV trend direction and MFI levels to confirm or reject trade signals from other indicators:
import requests
from typing import Optional
API_KEY = "YOUR_API_KEY"
BASE_URL = "https://tickatlas.com/v1"
def fetch_indicator(symbol: str, indicator: str, timeframe: str) -> dict:
resp = requests.get(
f"{BASE_URL}/indicator",
headers={"X-API-Key": API_KEY},
params={"symbol": symbol, "indicator": indicator, "timeframe": timeframe},
)
resp.raise_for_status()
return resp.json()["data"]
def volume_confirmation(
symbol: str, timeframe: str, proposed_direction: str
) -> dict:
"""Check if volume supports a proposed trade direction."""
obv_data = fetch_indicator(symbol, "OBV", timeframe)
mfi_data = fetch_indicator(symbol, "MFI_14", timeframe)
obv = obv_data["value"]
mfi = mfi_data["value"]
# For a real system, compare OBV to its own moving average
# Here we use the MFI level as primary and OBV as secondary
confirms = False
reasons = []
if proposed_direction == "long":
if mfi < 80:
confirms = True
reasons.append(f"MFI at {mfi:.1f} — not overbought")
else:
reasons.append(f"MFI at {mfi:.1f} — OVERBOUGHT, caution")
if mfi < 30:
reasons.append("MFI oversold — strong buy signal from volume")
elif proposed_direction == "short":
if mfi > 20:
confirms = True
reasons.append(f"MFI at {mfi:.1f} — not oversold")
else:
reasons.append(f"MFI at {mfi:.1f} — OVERSOLD, caution")
if mfi > 80:
reasons.append("MFI overbought — strong sell signal from volume")
return {
"symbol": symbol,
"direction": proposed_direction,
"volume_confirms": confirms,
"mfi": mfi,
"obv": obv,
"reasons": reasons,
}
# Example: check if a long signal on XAUUSD has volume support
result = volume_confirmation("XAUUSD", "H4", "long")
print(f"Volume confirms: {result['volume_confirms']}")
for reason in result["reasons"]:
print(f" - {reason}")OBV vs MFI: When to Use Each
Use OBV for trend confirmation
OBV is best at confirming whether a trend has genuine buying or selling pressure behind it. Compare OBV direction with price direction to spot divergences.
Use MFI for overbought/oversold
MFI works like RSI but includes volume weighting. It is better at identifying exhaustion points where buying or selling pressure is running out.
Use both together for confluence
When OBV confirms the trend direction and MFI is not at an extreme, you have strong volume confluence for a continuation trade.
Run this against live data.
Every account starts pay-as-you-go with $2.50 of credit and no card. Paste the key into the samples above and the requests work unchanged.