Understanding Cumulative Volume Delta
Cumulative Volume Delta (CVD) is an order flow tool that measures the difference between aggressive buying and aggressive selling over time.
While traditional volume shows activity, CVD helps reveal which side of the market is creating that activity.
Positive CVD suggests stronger buying pressure, while negative CVD suggests stronger selling pressure.
How Traders Use CVD
Traders commonly use CVD to identify:
- Trend confirmation
- Momentum strength
- Buyer and seller control
- Exhaustion
- Divergence
- Potential reversals
CVD Divergence
One of the most popular uses of CVD is identifying divergence between price and order flow.
Examples:
- Price makes higher highs while CVD weakens
- Price makes lower lows while CVD improves
These situations can indicate that the underlying market pressure does not match the visible price movement.
CVD and Other Analysis
CVD works well alongside:
- VWAP
- Market structure
- Support and resistance
- Momentum indicators
- Price action
By combining CVD with traditional technical analysis, traders gain additional insight into market participation.
Apply CVD Analysis With Media-Driven Indicators
The JJ CVD indicator helps traders visualize cumulative buying and selling pressure while identifying important changes in market behavior.