[astropark] Cumulative Volume Delta (CVD)

15 mars 2021

Dear Followers,

today another awesome Analysis Tool, that you can use in your trading journey: Cumulative Volume Delta (CVD), also known as Cumulative Delta Volume (CDV)!

Volume says a lot about price action:

• price drops with low volume? or price pumps but no volume increase?
  
• big sellers volume but price does not drop? or big buyers volume but price does not increase?
  

The Cumulative Volume Delta measures the effectiveness of buyers and sellers' actions, so basically if the volume they generate with their buy and sell market orders is effective on price or not.
When it's not effective, a divergence appears and we, as traders, can profit from it.

Here some examples how you can use the indicator by spotting divergences between price and cumulative volume delta.

EURUSD, 15m
sellers trying hard to make price fall, but volume is lacking on CVD (exhaustion): bullish divergence


EURUSD, 15m
buyers trying hard to make price go up, but volume is lacking on CVD (exhaustion): many bearish divergences


SPX500, 15m
buyers exhaustion: bearish divergence


XAUUSD, 15m
sellers exhaustion: bullish divergences


XAGUSD, 15m
buyers exhaustion: bearish divergence


BTCUSD, 15m
buyers exhaustion: bearish divergence (in red)
buyers absorbed sellers' pressure: hidden bullish divergence (in green)


BTCUSD, 15m
inefficiency by buyers: higher and higher buy volume but it's not effective on price (sellers absorbed): hidden bearish divergence (in blue)
sellers exhaustion: bullish divergences (in green)
buyers exhaustion: bearish divergence (in red)


ETHBTC, 15m
buyers exhaustion: bearish divergence (in red)
inefficiency by sellers: higher and higher sell volume but it's not effective on price (buyers absorbed): hidden bullish divergence (in blue)


TSLA, 15m
inefficiency by sellers, sellers pressure absorbed by buyers: hidden bullish divergence (in blue)
buyers exhaustion: bearish divergence (in red)
sellers exhaustion: bullish divergence (in green)
inefficiency by buyers, sellers pressure absorbed by sellers: hidden bearish divergence (in fuchsia)



This indicator works on every timeframe, market and pair, by the way must be said that it works best on 15m and 5m timeframes, as you can have access to a more detailed volume information.
As I always say, all tools are great if you use them correctly: this is not the "Holy Grail", so always use proper money and risk management strategies.


This is a premium indicator, so send me a private message in order to get access to this script.

27 janv. 2022

Notes de version

From now on, the indicator will calculate divergences for you, both regular and hidden ones. Of course you can set alerts over them.
You can customize colors and choose to hide the CVD plot in order to place the indicator in overlay on the chart to better see where divergences are found.
Divergences analysis window is set to 500 by default: the higher the number, the less divergences will be found, while the lower the number, the higher the number of divergences displayed.
Also source code has upgraded to pine script v5.