Plutus Flow - Statistical OBV Analysis

Plutus Flow - Statistical OBV Analysis

Plutus Flow transforms raw On-Balance Volume (OBV) into a filtered, statistically-bounded oscillator with automatic divergence detection. The indicator is designed to help traders analyze cumulative buying and selling pressure through three integrated analytical layers: spike-clipped volume accumulation, standard deviation banding, and pivot-synchronized divergence detection.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗢𝗩𝗘𝗥𝗩𝗜𝗘𝗪

On-Balance Volume (OBV) is a classic momentum indicator that tracks cumulative volume flow. When price closes higher, the bar's volume is added to OBV; when price closes lower, volume is subtracted. The resulting cumulative line can help identify whether volume is flowing into or out of an asset.

Plutus Flow builds on this foundation by adding three analytical layers:

• 𝗦𝗽𝗶𝗸𝗲-𝗖𝗹𝗶𝗽𝗽𝗲𝗱 𝗩𝗼𝗹𝘂𝗺𝗲: Caps extreme volume bars to preserve trend continuity
• 𝗦𝘁𝗮𝘁𝗶𝘀𝘁𝗶𝗰𝗮𝗹 𝗕𝗮𝗻𝗱𝘀: Defines mathematically-derived extreme zones
• 𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝗰𝗲 𝗗𝗲𝘁𝗲𝗰𝘁𝗶𝗼𝗻: Identifies structural disagreements between price and OBV

Each layer serves a specific analytical purpose, and together they provide a structured framework for interpreting volume-based pressure.

════════════════════════════════════════



The indicator displays filtered OBV (colored line), basis line (orange), statistical bands (green), and the flow ribbon between OBV and basis.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗛𝗢𝗪 𝗜𝗧 𝗪𝗢𝗥𝗞𝗦

The indicator is built around one core principle: cumulative buying and selling pressure may reveal accumulation or distribution patterns before price confirms them. Rather than displaying raw OBV, Plutus Flow processes it through three analytical layers.

𝗦𝗽𝗶𝗸𝗲-𝗖𝗹𝗶𝗽𝗽𝗲𝗱 𝗢𝗕𝗩

𝘞𝘩𝘢𝘵 𝘪𝘵 𝘥𝘰𝘦𝘴: Standard OBV accumulates every tick of volume equally, meaning one earnings candle or news event can permanently distort the cumulative total. This implementation dynamically caps each bar's volume contribution using a rolling average multiplier, preserving the underlying trend signal while filtering anomalous spikes.

𝘏𝘰𝘸 𝘵𝘰 𝘪𝘯𝘵𝘦𝘳𝘱𝘳𝘦𝘵 𝘪𝘵: The filtered OBV line represents the cumulative pressure trend without distortion from outlier events. When this line is rising, it may suggest net buying pressure over time. When falling, it may suggest net selling pressure. The filtering helps maintain visual continuity across volatile events like earnings releases or major news announcements.

𝗦𝘁𝗮𝘁𝗶𝘀𝘁𝗶𝗰𝗮𝗹 𝗕𝗮𝗻𝗱𝘀

𝘞𝘩𝘢𝘵 𝘪𝘵 𝘥𝘰𝘦𝘴: A smoothed moving average serves as the basis line, with standard deviation bands defining statistically extreme zones above and below. The bands adapt to each symbol's recent volatility profile.

𝘏𝘰𝘸 𝘵𝘰 𝘪𝘯𝘵𝘦𝘳𝘱𝘳𝘦𝘵 𝘪𝘵: When OBV reaches the upper band, cumulative buying pressure has moved beyond its recent normal range: this may indicate an extended condition. Similarly, when OBV reaches the lower band, selling pressure may be statistically extended. These zones are not automatic reversal signals, but rather areas that may warrant closer attention. Extended conditions can persist during strong trends.

𝗙𝗹𝗼𝘄 𝗥𝗶𝗯𝗯𝗼𝗻

𝘞𝘩𝘢𝘵 𝘪𝘵 𝘥𝘰𝘦𝘴: The area between OBV and its basis line is filled to create a visual ribbon. Color indicates whether OBV is above or below its average, and color intensity shifts based on momentum direction.

𝘏𝘰𝘸 𝘵𝘰 𝘪𝘯𝘵𝘦𝘳𝘱𝘳𝘦𝘵 𝘪𝘵: Green ribbon indicates OBV above basis (buying pressure may be dominant). Red ribbon indicates OBV below basis (selling pressure may be dominant). The ribbon provides quick visual context for the current pressure regime without requiring precise reading of the oscillator value.

𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝗰𝗲 𝗗𝗲𝘁𝗲𝗰𝘁𝗶𝗼𝗻

𝘞𝘩𝘢𝘵 𝘪𝘵 𝘥𝘰𝘦𝘴: The script automatically identifies pivot highs and lows on both price and OBV. When price structure disagrees with OBV structure: for example, price makes a lower low while OBV makes a higher low: divergence is detected. Labels appear only when pivots are confirmed and synchronized within a tolerance window.

𝘏𝘰𝘸 𝘵𝘰 𝘪𝘯𝘵𝘦𝘳𝘱𝘳𝘦𝘵 𝘪𝘵: Divergences may indicate structural disagreement between price action and underlying volume pressure. A bullish divergence (price lower low, OBV higher low) could suggest that selling pressure is weakening despite lower prices. A bearish divergence (price higher high, OBV lower high) could suggest that buying pressure is weakening despite higher prices. Divergences are not guaranteed reversal signals: they indicate a structural condition that traders may want to investigate further.

═══════════════════════════════════════


Example: A bullish divergence where price made a lower low while OBV made a higher low, suggesting selling pressure may be weakening.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗪𝗛𝗬 𝗧𝗛𝗘𝗦𝗘 𝗖𝗢𝗠𝗣𝗢𝗡𝗘𝗡𝗧𝗦 𝗪𝗢𝗥𝗞 𝗧𝗢𝗚𝗘𝗧𝗛𝗘𝗥

Price movements don't always reflect underlying volume activity. A price rally on declining volume may have different implications than a rally on increasing volume. Plutus Flow approaches this by layering three types of analysis that each address a different aspect of volume interpretation:

1. 𝗙𝗶𝗹𝘁𝗲𝗿𝗲𝗱 𝗣𝗿𝗲𝘀𝘀𝘂𝗿𝗲: Spike clipping ensures the OBV line represents consistent accumulation/distribution patterns rather than noise from outlier events. This creates a cleaner baseline for all subsequent analysis.

2. 𝗦𝘁𝗮𝘁𝗶𝘀𝘁𝗶𝗰𝗮𝗹 𝗖𝗼𝗻𝘁𝗲𝘅𝘁: Deviation bands provide mathematically-defined reference zones instead of arbitrary horizontal lines. This helps contextualize whether current pressure readings are within normal ranges or statistically extended.

3. 𝗦𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗮𝗹 𝗖𝗼𝗻𝗳𝗶𝗿𝗺𝗮𝘁𝗶𝗼𝗻: Divergence detection surfaces disagreements between price and pressure that traders may want to investigate. This adds a structural dimension beyond simple trend-following.

When multiple factors align: for example, OBV exiting an extreme band while showing divergence from price: this represents statistical extension plus structural disagreement occurring simultaneously. Such conditions may warrant additional analysis, though they do not guarantee any particular outcome.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗛𝗢𝗪 𝗧𝗢 𝗨𝗦𝗘

This section provides step-by-step guidance for interpreting the indicator's visual elements and incorporating them into chart analysis.

𝗦𝘁𝗲𝗽 𝟭: 𝗜𝗱𝗲𝗻𝘁𝗶𝗳𝘆 𝘁𝗵𝗲 𝗣𝗿𝗲𝘀𝘀𝘂𝗿𝗲 𝗥𝗲𝗴𝗶𝗺𝗲

Begin by observing the flow ribbon color:
• Green ribbon = OBV is above its basis line, which may indicate buying pressure is currently dominant
• Red ribbon = OBV is below its basis line, which may indicate selling pressure is currently dominant

This provides immediate context for the current pressure environment. A sustained green ribbon during a price uptrend may suggest the trend has volume support. A green ribbon turning red during an uptrend could indicate a potential shift in underlying pressure.

𝗦𝘁𝗲𝗽 𝟮: 𝗠𝗼𝗻𝗶𝘁𝗼𝗿 𝗕𝗮𝘀𝗶𝘀 𝗟𝗶𝗻𝗲 𝗖𝗿𝗼𝘀𝘀𝗲𝘀

Watch for the signal dots that appear when OBV crosses its basis line:
• Green dot = OBV crossed above basis (potential shift toward buying pressure)
• Red dot = OBV crossed below basis (potential shift toward selling pressure)

These crosses mark momentum shifts in the pressure regime. A green dot appearing after an extended red ribbon period could indicate early signs of pressure reversal. However, crosses can also occur during choppy conditions without leading to sustained moves.

𝗦𝘁𝗲𝗽 𝟯: 𝗔𝘀𝘀𝗲𝘀𝘀 𝗦𝘁𝗮𝘁𝗶𝘀𝘁𝗶𝗰𝗮𝗹 𝗘𝘅𝘁𝗿𝗲𝗺𝗲𝘀

Monitor the position of OBV relative to the deviation bands:
• White dot = OBV has entered an extreme zone (upper or lower band)
• Yellow dot = OBV has exited an extreme zone

When OBV reaches the upper band, cumulative buying pressure has moved beyond its recent statistical norm. This does not mean price must reverse: strong trends can maintain extended readings for prolonged periods. However, it does indicate that pressure is stretched relative to recent history.

Similarly, when OBV reaches the lower band, selling pressure is statistically extended. An exit from this zone (yellow dot) could indicate that selling pressure may be stabilizing.

═══════════════════════════════════════


Strong trend example: OBV remains elevated with sustained ribbon color and no divergence: indicating the trend may still have volume support.

𝗦𝘁𝗲𝗽 𝟰: 𝗖𝗵𝗲𝗰𝗸 𝗳𝗼𝗿 𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝗰𝗲𝘀

Review divergence labels when they appear:
• "Bull Div" label = Price made a lower low while OBV made a higher low (regular bullish divergence)
• "Bear Div" label = Price made a higher high while OBV made a lower high (regular bearish divergence)
• "Bull Hid" label = Price made a higher low while OBV made a lower low (hidden bullish divergence)
• "Bear Hid" label = Price made a lower high while OBV made a higher high (hidden bearish divergence)

Regular divergences may indicate weakening momentum in the current trend direction. Hidden divergences may indicate continuation potential within the existing trend. Neither type guarantees any particular outcome: they represent structural conditions for further analysis.

𝗦𝘁𝗲𝗽 𝟱: 𝗖𝗼𝗺𝗯𝗶𝗻𝗲 𝗠𝘂𝗹𝘁𝗶𝗽𝗹𝗲 𝗙𝗮𝗰𝘁𝗼𝗿𝘀

The indicator provides the most context when multiple elements align:

𝘌𝘹𝘢𝘮𝘱𝘭𝘦 𝘚𝘤𝘦𝘯𝘢𝘳𝘪𝘰 𝘈: 𝘛𝘳𝘦𝘯𝘥 𝘊𝘰𝘯𝘵𝘪𝘯𝘶𝘢𝘵𝘪𝘰𝘯
OBV at the upper band, ribbon solid green, no divergence labels present. Price rising, volume confirming, no structural disagreement. OBV can stay extended during strong trends. The absence of divergence suggests the trend may still have volume support.

𝘌𝘹𝘢𝘮𝘱𝘭𝘦 𝘚𝘤𝘦𝘯𝘢𝘳𝘪𝘰 𝘉: 𝘔𝘰𝘮𝘦𝘯𝘵𝘶𝘮 𝘍𝘢𝘥𝘪𝘯𝘨
OBV shows bullish with green ribbon, but the line has flattened near the basis. Price still rising, but volume is no longer confirming. Ribbon width narrowing. This type of disconnect between price action and volume momentum often appears before moves stall.

𝘌𝘹𝘢𝘮𝘱𝘭𝘦 𝘚𝘤𝘦𝘯𝘢𝘳𝘪𝘰 𝘊: 𝘌𝘹𝘩𝘢𝘶𝘴𝘵𝘪𝘰𝘯 𝘞𝘢𝘳𝘯𝘪𝘯𝘨
Price making higher highs while OBV makes lower highs. A "Bear Div" label appears with OBV still in the upper extreme zone. Yellow dot signals exit from extreme. Multiple warning signs appearing together (divergence, extreme zone exit, weakening internals) suggest caution.

𝘌𝘹𝘢𝘮𝘱𝘭𝘦 𝘚𝘤𝘦𝘯𝘢𝘳𝘪𝘰 𝘋: 𝘉𝘳𝘦𝘢𝘬𝘰𝘶𝘵 𝘍𝘳𝘰𝘮 𝘊𝘰𝘯𝘴𝘰𝘭𝘪𝘥𝘢𝘵𝘪𝘰𝘯
OBV has been flat for several days, ribbon alternating red and green, no clear direction. Then OBV breaks above its recent range, ribbon turns solid green, green cross dot appears. When multiple elements shift together after a quiet period, consolidation may be resolving into a directional move.

═══════════════════════════════════════



Multiple factors aligning: OBV exiting extreme zone while divergence appears and ribbon shifts color: a confluence condition that may warrant closer attention.

𝗦𝘁𝗲𝗽 𝟲: 𝗖𝗼𝗻𝗳𝗶𝗴𝘂𝗿𝗲 𝗔𝗹𝗲𝗿𝘁𝘀

Ten built-in alert conditions are available to notify you of specific events:
• Basis line crosses (up/down)
• Extreme zone entries (upper/lower)
• Extreme zone exits (upper/lower)
• Divergence detection (all four types)

Alerts can be set through TradingView's alert dialog after adding the indicator to your chart.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗡𝗔𝗩𝗜𝗚𝗔𝗧𝗜𝗡𝗚 𝗗𝗜𝗙𝗙𝗘𝗥𝗘𝗡𝗧 𝗠𝗔𝗥𝗞𝗘𝗧 𝗖𝗢𝗡𝗗𝗜𝗧𝗜𝗢𝗡𝗦

𝗧𝗿𝗲𝗻𝗱𝗶𝗻𝗴 𝗠𝗮𝗿𝗸𝗲𝘁𝘀

During strong trends, OBV may remain in extreme zones for extended periods. This is normal behavior: statistical extremes are not automatic reversal signals. In trending conditions, traders may focus more on:
• Whether divergences are forming (potential trend weakening)
• Ribbon color persistence (trend confirmation)
• Basis line crosses as potential re-entry points during pullbacks

For example, in a sustained uptrend, OBV might stay above the upper band for days or weeks. Rather than treating this as an immediate reversal signal, traders may watch for divergence to form as a potential early warning that the trend could be losing momentum. A bearish divergence appearing while OBV is in the upper extreme could be more significant than either condition alone.

𝗥𝗮𝗻𝗴𝗶𝗻𝗴 𝗠𝗮𝗿𝗸𝗲𝘁𝘀

In sideways conditions, OBV may oscillate between bands more frequently. Traders may focus on:
• Extreme zone exits as potential mean-reversion conditions
• Divergences that form at range boundaries
• Ribbon color flips that may indicate short-term pressure shifts

In ranging environments, the statistical bands may provide clearer reference points. When OBV touches the lower band and then exits (yellow dot) near range support, this could suggest selling pressure is stabilizing. Conversely, when OBV touches the upper band near range resistance and divergence forms, this could indicate buying pressure is weakening at that level.

𝗛𝗶𝗴𝗵 𝗩𝗼𝗹𝗮𝘁𝗶𝗹𝗶𝘁𝘆 𝗘𝘃𝗲𝗻𝘁𝘀

During earnings, news events, or market shocks, the spike-clipping feature helps maintain OBV continuity. However, sustained high-volume regimes may still push readings to extremes. The HTF filter option can help provide broader context during volatile periods.

For volatile events, traders may want to observe how OBV behaves after the initial spike. If OBV quickly returns toward its basis after a news-driven extreme, this could suggest the move lacked follow-through volume. If OBV maintains its new level or continues in the same direction, this could suggest the move has genuine volume support.

𝗠𝘂𝗹𝘁𝗶-𝗧𝗶𝗺𝗲𝗳𝗿𝗮𝗺𝗲 𝗖𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗮𝘁𝗶𝗼𝗻𝘀

The optional HTF filter allows traders to align lower timeframe analysis with higher timeframe pressure direction. When the HTF filter shows bullish pressure, traders may give more weight to bullish signals on lower timeframes. When HTF and LTF pressure align, this could suggest stronger directional conviction, though no outcome is guaranteed.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗧𝗘𝗖𝗛𝗡𝗜𝗖𝗔𝗟 𝗗𝗘𝗧𝗔𝗜𝗟𝗦

• Volume capping uses RMA-based averaging with a multiplier threshold
• Statistical bands use SMA for basis with standard deviation for band width
• Pivot detection uses left/right bar confirmation before registering swing points
• Divergence requires both price pivot and OBV pivot to occur within a tolerance window
• All signals fire on bar close only (non-repainting)
• HTF data retrieved using request.security() with lookahead disabled

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗨𝗡𝗜𝗤𝗨𝗘 𝗙𝗘𝗔𝗧𝗨𝗥𝗘𝗦

• 𝗔𝗱𝗮𝗽𝘁𝗶𝘃𝗲 𝗩𝗼𝗹𝘂𝗺𝗲 𝗙𝗶𝗹𝘁𝗲𝗿𝗶𝗻𝗴: Volume cap adjusts dynamically to each symbol's activity profile, not a fixed threshold.

• 𝗦𝘆𝗻𝗰𝗵𝗿𝗼𝗻𝗶𝘇𝗲𝗱 𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝗰𝗲: Requires pivot alignment between price and OBV within tolerance window, helping filter timing mismatches.

• 𝗙𝗼𝘂𝗿 𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝗰𝗲 𝗧𝘆𝗽𝗲𝘀: Detects Regular Bullish, Regular Bearish, Hidden Bullish, and Hidden Bearish patterns.

• 𝗘𝘅𝘁𝗿𝗲𝗺𝗲 𝗭𝗼𝗻𝗲 𝗘𝘃𝗲𝗻𝘁𝘀: Separate signals for entering extreme zones versus exiting them.

• 𝗛𝗧𝗙 𝗔𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁: Optional higher timeframe filter for directional context.

• 𝗡𝗼𝗻-𝗥𝗲𝗽𝗮𝗶𝗻𝘁𝗶𝗻𝗴: All calculations use confirmed bar data only. Historical display matches live behavior.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗦𝗘𝗧𝗧𝗜𝗡𝗚𝗦 𝗢𝗩𝗘𝗥𝗩𝗜𝗘𝗪

• 𝗖𝗮𝗹𝗰𝘂𝗹𝗮𝘁𝗶𝗼𝗻: HTF timeframe for OBV calculation
• 𝗤𝘂𝗮𝗹𝗶𝘁𝘆: FlipGuard cooldown, cross gating, Z-score filtering, sequence requirements
• 𝗔𝘀𝘀𝗶𝘀𝘁𝘀: HTF alignment filter for directional context
• 𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝗰𝗲: Minimum price swing filter (ATR-based) to control divergence sensitivity
• 𝗩𝗶𝘀𝘂𝗮𝗹𝘀: Toggle divergence labels, extreme zone exit markers, and ribbon display

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗔𝗟𝗘𝗥𝗧𝗦

10 conditions available:
• Cross Up / Cross Down: Basis line crosses
• Breach Upper / Breach Lower: Extreme zone entries
• Exit Upper / Exit Lower: Extreme zone exits
• Bullish Divergence / Bearish Divergence: Regular divergence
• Hidden Bullish / Hidden Bearish: Continuation divergence

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗟𝗜𝗠𝗜𝗧𝗔𝗧𝗜𝗢𝗡𝗦

• 𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝘀 𝘃𝗼𝗹𝘂𝗺𝗲 𝗱𝗮𝘁𝗮: Does not function on forex spot pairs or instruments without real volume data. The indicator requires actual volume to calculate OBV.

• 𝗔𝗻𝗮𝗹𝘆𝘀𝗶𝘀 𝘁𝗼𝗼𝗹, 𝗻𝗼𝘁 𝗮 𝘀𝗶𝗴𝗻𝗮𝗹 𝗴𝗲𝗻𝗲𝗿𝗮𝘁𝗼𝗿: This indicator shows where pressure exists and identifies structural conditions. It does not tell you when to trade. All trading decisions should incorporate additional analysis and risk management.

• 𝗗𝗶𝘃𝗲𝗿𝗴𝗲𝗻𝗰𝗲𝘀 𝗮𝗿𝗲 𝗻𝗼𝘁 𝗴𝘂𝗮𝗿𝗮𝗻𝘁𝗲𝗲𝗱 𝗿𝗲𝘃𝗲𝗿𝘀𝗮𝗹𝘀: Divergences indicate structural disagreement between price and volume. They can persist, fail, or resolve without the expected outcome. They should not be followed blindly.

• 𝗘𝘅𝘁𝗿𝗲𝗺𝗲𝘀 𝗰𝗮𝗻 𝗽𝗲𝗿𝘀𝗶𝘀𝘁: During strong trends, OBV can remain in extreme zones for extended periods. Statistical extension does not guarantee mean reversion.

• 𝗗𝗮𝘁𝗮 𝗾𝘂𝗮𝗹𝗶𝘁𝘆 𝗱𝗲𝗽𝗲𝗻𝗱𝗲𝗻𝗰𝘆: Effectiveness depends on market liquidity and volume data quality. Thinly traded instruments may produce less reliable readings.

• 𝗟𝗮𝗴𝗴𝗶𝗻𝗴 𝗶𝗻𝗱𝗶𝗰𝗮𝘁𝗼𝗿: Like all volume-based indicators, signals are derived from historical data. By the time a divergence is confirmed, some of the move may have already occurred.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗖𝗢𝗡𝗖𝗟𝗨𝗦𝗜𝗢𝗡

Plutus Flow provides a structured framework for analyzing On-Balance Volume through filtered accumulation, statistical banding, and divergence detection. The indicator is designed to help traders interpret volume-based pressure and identify structural conditions that may warrant further analysis.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

🔶 𝗗𝗜𝗦𝗖𝗟𝗔𝗜𝗠𝗘𝗥

Trading is risky and most traders lose money. This indicator is provided for informational and educational purposes only. It does not constitute financial advice, and past performance does not guarantee future results. All content, tools, and analysis should not be considered as recommendations to buy or sell any asset. Users are solely responsible for their own trading decisions. Always use proper risk management and consider consulting a qualified financial advisor before making trading decisions.

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

Built with PineScript v6. Non-repainting. All signals confirmed on bar close.