Cumulative Volume Delta Histogram CVD Histogram

The Cumulative Volume Delta Histogram tool tracks the cumulative difference between buying and selling volumes over time to help traders evaluate market dynamics and identify potential trend reversals.

Usage

The Cumulative Volume Delta (CVD) provides a macro view of market pressure by aggregating delta values (the difference between buying and selling volume).

• Trend Analysis: An upward-trending CVD indicates bullish sentiment, suggesting buyers are in control. Conversely, a downward-trending CVD suggests dominant selling pressure, typically a bearish signal.
• Trend Exhaustion: Traders can spot potential reversals by looking for failures in momentum. For example, if price reaches a new low but the CVD does not, it may indicate a lack of seller interest and potential exhaustion.
• Divergence: Divergence occurs when CVD breaks a previous high or low while price remains stable. If CVD rises sharply without a corresponding price increase, it suggests sellers are absorbing buying pressure, which could lead to a sell-off once absorption ends.

Details

Unlike standard Volume Delta, which calculates the difference on a candle-by-candle basis, CVD accumulates these values to provide a smoother representation of market swings. The indicator uses the relationship between the close, high, and low of each bar to estimate buying and selling volume when tick data is not available. Furthermore, the "Market Ultra Data" feature can be used to aggregate volume data across multiple major brokers to provide a more comprehensive view of market activity for Forex and Crypto markets.

Settings

• Cumulative Mode: Determines how the delta is accumulated. "Total" accumulates from the beginning of the history; "Periodic" sums the delta over a fixed rolling window; "EMA" applies an Exponential Moving Average to smooth the delta values.
• Period: Sets the lookback period for the "Periodic" and "EMA" calculation modes.
• Market Ultra Data: When enabled, the indicator attempts to pull volume data from up to 26 different brokers to provide more accurate volume analysis.
• Market: Specifies the asset class (Forex, Crypto, or Stock) to ensure the Ultra Data feature pulls from the correct list of external symbols.

FAQ

How do I access Cumulative Volume Delta Histogram?

You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.

What is the difference between Periodic and Total mode?

Total mode provides an all-time cumulative sum starting from the first available bar on the chart, while Periodic mode focuses on a specific rolling window defined by the "Period" setting to show recent pressure.

Can this be used for Forex?

Yes, by enabling the "Market Ultra Data" and setting the market to "Forex," the indicator aggregates volume data from various FX brokers to compensate for the lack of centralized volume in the Forex market.