1 The Story
“Volume precedes price”
Joseph Granville built On-Balance Volume in the 1960s to capture a simple idea: that the flow of volume often shifts before price does — and that tracking it as a running total can reveal accumulation and distribution.
Joseph Ensign Granville (August 20, 1923 – September 7, 2013) grew up in Yonkers, served in the U.S. Navy in WWII, and graduated from Duke. Hired by E.F. Hutton in 1957 to write a daily market letter, he left in 1963 to found The Granville Market Letter, which he wrote until shortly before his death. His dramatic, theatrical forecasts could move markets in the 1970s and 1980s — a reminder that fame and forecasting accuracy are not the same thing.1
2 The Big Idea
On-Balance Volume
Turn volume into a single running line
Add the day's volume to a running total when price closes up, subtract it when price closes down.
The resulting OBV line is meant to show whether volume is flowing into or out of a stock — a cumulative read on accumulation versus distribution.1
3 The Method & Contribution
How On-Balance Volume works
A cumulative total
Volume is added on up-closes and subtracted on down-closes, building one continuous line.1
Confirmation
A rising OBV alongside rising price suggests the move is backed by participation.1
Divergence
OBV falling while price rises can warn that buying conviction is thinning.1
Honest caveat
Granville's public forecasts were often wrong despite his fame — the indicator is a tool, not a crystal ball.1
4 See It On This Site
Volume, explained on this site
Go deeper
Our Volume deep dive covers OBV and the broader role of volume — what it reliably shows, and where traders read too much into it.
5 In Their Words
The idea, in brief
"Volume precedes price."— the principle at the heart of Granville's On-Balance Volume.1
A widely attributed summary of his OBV thesis; presented as his guiding principle.
6 The Work
His key contribution in print
Granville's New Key to Stock Market Profits
Prentice-Hall · 1963- Introduced On-Balance Volume to a wide audience.
- Laid out his volume-first approach to market timing.
7 Read More
Go deeper
§ Sources
- Joseph Granville — biography & On-Balance Volume — Wikipedia; Britannica Money.