Introduction
My greetings goes to everyone in the community at this time of the day, trust you are all having a great new learning week at the Academy. Last week, I presented a lecture on a technical indicator and it was titled Trading Crypto with On-Balance-Volume Indicator, I will be using this piece to give a summary of how things went in different homework task entries received.
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Overview of On-Balance-Volume Indicator
On-Balance Volume indicator is a technical tool used in technical analysis of stock/crypto markets and it is a momentum indicator that measures the volume of trades injected into a market in any direction (buy/sell) to present its line and this indication shows how volume affects/supports the movement of the price of an asset in any market of study. Basically, this indicator measures the pressure of buy/sell in a market to plot its line, and of course, that affects the price of the asset.
It is also important to know that this indicator works on a cumulative basis, that is, on days when the price of an asset rises, volume is added (volume-up) and on a day when the price of the asset falls, volume is subtracted (volume-down). In addition, the oscillating line of On-Balance Volume indicator can be positive or negative since it works on a basis of adding/subtracting volume depending on the close of the day as compared to the previous day. Let's take a look at some observations in the homework entries received.
Observations
In this section, I will be talking about a few things that I observed in the homework tasks received. And I will be highlighting a few things that dented some entries submitted for the homework task.
Calculation of OBV
While some homework tasks incompletely attended the section by giving only the formulas without an illustrative example, some attempted the calculation and a few errors were seen in some calculations. Let's take a look at the formula again and see common mistakes made by the students.
- If the current price close is higher than the previous day's close, then, OBV = OBVprevious + Current Volume .
- If the current price close equals the previous day's close, then, OBV = OBVprevious + 0.
- If the current price is lower than the previous day's close, then, OBV = OBVprevious - Current Volume.
From the formulas above, we are adding/subtracting volume depending on the current close price as compared to the previous day's close. Some homework tasks are adding/subtracting current price which is very wrong. Kindly take note. Let's consider a 4-day calculation of the OBV and see what we have.
- Day 1: Price Close is $5 with 10,000 volume.
- Day 2: Price Close is $7 with 16,500 volume.
- Day 3: Price Close is $6.5 with 14,000 volume.
- Day 4: Price Close is $8 with 17,500 volume.
Then, OBV equals;
- Day 1 OBV = 0
- Day 2 OBV = 0 + 16,500 = 16,500.
- Day 3 OBV = 16,500 - 14,000 = 2,500.
- Day 4 OBV = 2,500 + 17,500 = 20,000.
Above is how OBV is simply calculated. Note: The first-day OBV equals zero because there is no previous day to compare its close price with, some students made an error in that aspect. Also, note that when the previous close price equals the current closing price then your OBV equals the previous OBV. Kindly take note.
Advanced Breakout
We talked about advanced breakout with OBV and this is a point where the price of the asset failed to break the previous high/low but the OBV line breaks above/below to give a breakout signal which signifies that the asset would go further in the direction of the breakout. Many entries got it well while some had a break and sharply broke below/above the breakout again, we should consider a break that stays above/below for a while, for a valid breakout. Let's see the chart I used in the lecture again.
Take a look at the chart above again, when the OBV line broke above the previous high even when the price was unable to break the previous high yet, it hovers above the breakout for a while. The first swing low it made after the breakout is still above break, this is a valid advanced breakout, students should aim at least at such a situation to give a valid chart.
Understanding of the Context
This is a very important section to talk about, before you start writing a homework task, ensure you have understood at least 80% of the context. Some entries were marked plagiarized because they couldn't take an idea from a source and write in their own words. Many entries copied the illustrative example of how to calculate OBV from other sources and spun it, this is not good practice. Do ensure you have a perfect understanding of what you writing on so that you don't end up a victim of plagiarism.
Statistics
The fourth week of the Crypto Academy season 5 has ended and last week, the lecture "Trading Crypto with On-Balance Indicator" received a total of 51 homework task entries, and all were attended to timely as far as review is concerned. Below is the performance table of the participants in the homework task:
| Grade | Frequency |
|---|---|
| Excellent | 14 |
| Very Good | 16 |
| Good | 14 |
| Average | 1 |
| Below Average | 3 |
| Plagiarized Content | 2 |
| Invalid | 1 |
| Total | 51 |
Excellent represents grades within 9 - 10, Very Good for grades within 8 - 8.9, Good for grades within 6 - 7.9, Average for grades within 5 - 5.9, Below Average for grades below 5, Plagiarized are the contents that are found to have been copied from another source without proper reference and Invalid are incomplete articles/Users Powering down/Insufficient SP for the Advanced level. For the just concluded week, 3 entries were below average, 2 plagiarized entries were received, and 1 invalid entry (due to submission after the deadline).
Top 3 Articles for the Week
| Rank | Author | Article's Link |
|---|---|---|
| 1 | @lupafilotaxia | Link |
| 2 | @emiliomoron | Link |
| 3 | @beautiful12 | Link |
Conclusion
In conclusion, the homework task entries received last week are quite impressive, although, a few entries couldn't make it to the excellent range because of some inconsistencies. My advice on this is that students should spare more time to go through their homework tasks again before publishing to ensure that the requirements of the task have been met. In addition, students can also use Grammarly to take care of likely grammatical errors. Thanks for the participation.
Wow, it is an honor for me to be able to read my username in the top your class, thank you professor @fredquantum may God continue to give you life and wisdom.
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Congratulations!
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Love your hard work
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Thank you.
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My regards Professor. Wow, it is an honor to be in the top 3 of your class, thank you very much for your hard work and congratulations to all the authors.
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Congratulations!
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