Cumulative Delta Difference Histogram

14 nov.

INTRODUCTION:

This "Cumulative Delta Difference Histogram" is a volume-based indicator that calculates the difference (delta) between aggressive buying volume and selling volume for each candle and then builds a cumulative momentum histogram with the following behavior:

Momentum Tracking: The indicator accumulates the delta values when the delta is positive and increasing, producing green bars whose height visually represents growing buying pressure momentum.

Negative Momentum Detection: When the delta becomes negative or starts to decline, the histogram bars turn red and the accumulation decreases, effectively showing increasing selling pressure momentum.

Directional Reset: On each change from positive to negative delta momentum or vice versa, the accumulator resets to zero, providing a clear and sharp visualization of shifts without persistence from previous trends.

Zero Reference Line: A horizontal zero line serves as a visual baseline to distinguish positive from negative momentum easily.

HOW TO USE:

To trade effectively using the "Cumulative Delta Difference Histogram," you compare the price action chart with the indicator to confirm momentum and detect potential reversals or continuations. Here's how to do it in practice:

Confirming Trends:
When the price is rising, look for the histogram bars to be green and increasing, indicating strong and growing buying pressure supporting the uptrend. If price rises but the histogram shows diminishing green bars or shifts to red, it could signal weakening momentum and a potential reversal.

Identifying Divergences:
Compare price highs/lows with histogram peaks. If price makes a new high but the histogram fails to make a corresponding new high (bearish divergence), it warns of a possible trend reversal. Conversely, if price makes a new low but histogram shows higher lows (bullish divergence), it signals potential bullish reversal.

Volume Confirmation:
The histogram reflects real-time volume aggression behind price moves. Confirmation of price breakouts or breakdowns by corresponding strong histogram colors and bar height increases adds reliability to signals.

By aligning price patterns and levels with the cumulative delta histogram's signals, traders gain a deeper understanding of market strength and better timing for trades.

This combined approach improves the accuracy of entries and exits beyond relying on price alone, especially in markets sensitive to order flow and volume dynamics.

Use this indicator with a default volume or with my other indicator "Agression Histogram" for a better reading.

avant-hier

Notes de version

This version of the code has been enhanced to improve user readability and data interpretation by:

1- Clearly displaying the positive and negative histograms independently, allowing users to distinguish upward and downward deltas more easily;

2- Introducing a filling between the histogram bars and the zero line to visually "close the gaps" between bars, which smooths the appearance and helps users better identify trends and divergences. This fill feature can be toggled on or off through the script options for user customization.

These adjustments make it easier for users to read and analyze cumulative delta movements by providing a continuous and visually intuitive histogram representation.

Note: This indicator is intended solely as a visual aid and should be used in conjunction with volume and price action analysis. It is designed to be the last step in your analytical process—not the first—to confirm breakouts and divergences. Relying on it exclusively without considering broader market context may lead to incomplete conclusions.

avant-hier

Notes de version

The code has been updated to include an optional noise filter based on Bollinger Bands logic (Disabled by default).