An often overlooked Technical Indicator is the Confirming Indicator. It does not provide a trend to the trader nor does it provide entry signals. New traders are looking for action and not something boring as a Confirming Indicator. So it often lacks the attention but it can be great tool to identify fake trends and the potential end of a trend. Trading is about stacking up the odds and what better way to do that by using a Confirming Indicator. On Balance Volume measures the volume on up days and down days and then accumulates the data. This is means when the trend is up, On Balance Volume should climb with it. If price makes new highs but On Balance Volume makes a lower high it signals a potential reversal. So when using this Confirming Indicator it can help the trader not take that last pull back in the uptrend or perhaps signalling to the trader that it is time to book some profit after riding that trend. Another time this Confirming Indicator is helpful is at breakouts. If price breaks resistance after a downtrend but On Balance Volume fails to make new highs then the breakout has a much higher risk of being a fake breakout. If On Balance Volume breaks into new highs before price does then you have a much higher chance that the break out is valid and price will continue in the direction of the breakout. In our next lesson we will be looking at how these Technical Indicators can be combined.