CVD: cumulative delta and divergences

CVD (cumulative volume delta) adds up successive deltas from a starting point, usually the session open. If aggressive buyers keep dominating, the curve rises; if sellers dominate, it falls. Where a bar's delta measures a battle, CVD tells the story of the war.

It is displayed under price, as a second curve. Its absolute value matters little (it depends on the starting time); what matters is its slope, and above all whether or not it follows price moves.

The two readings of CVD

1. Confirmation: price makes new highs and so does CVD. Aggressive buyers are behind the rally: it is supported. The same goes for a decline.
2. Divergence: price makes a new high, but CVD makes a lower peak than the previous one. The new high was reached with less aggression: the rally is running out of steam.