CVD Divergences

The CVD Divergences indicator identifies discrepancies between price action and Cumulative Volume Delta (CVD) to highlight potential market reversals and shifts in conviction. By applying advanced divergence detection logic to volume flow, this tool helps traders distinguish between high-conviction moves and exhausting price trends.

Usage

The indicator can be used to identify two primary types of divergences based on volume flow:

• Bullish Divergence: Occurs when price makes a Lower Low while the CVD makes a Higher Low or equal low. This suggests selling pressure is exhausting and a reversal may be imminent.
• Bearish Divergence: Occurs when price makes a Higher High while the CVD makes a Lower High or equal high. This indicates weakening buying pressure despite rising prices.

Traders can refine signal quality using the following features:

• Detection Methods: Choose between "Alignment with HTF Sweep" for higher-probability signals or "All" for a more sensitive detection engine.
• Auto-Align HTF: Automatically selects a relevant higher timeframe (e.g., 15m chart uses 4H analysis) to provide a broader context for local price movements.
• Anchored Periods: Reset the CVD calculation on Daily, Weekly, or Monthly intervals, or use "Continuous" for a long-term view of volume flow.

Details

This script adapts the divergence detection engine originally developed for RSI-based momentum to Cumulative Volume Delta (CVD). While momentum oscillators track price speed, CVD tracks the net aggressive buying (ask) vs. selling (bid) volume.

The implementation uses a high-precision calculation method that can pull data from lower timeframes (LTF) to reconstruct CVD candles with accurate intra-bar highs and lows. This provides a more granular look at volume distribution compared to standard candle-based volume analysis.

Settings

Divergence Settings

• Method: Selects the logic for finding divergences ("Alignment with HTF Sweep" or "All").
• Show CVD Divergence: Toggles the visibility of divergence labels and lines.

CVD Settings

• Use High Precision CVD: Enables the use of a lower timeframe to calculate more accurate CVD values and wicks.
• CVD Anchor Period: Defines the reset interval for the cumulative volume (Continuous, Daily, Weekly, or Monthly).

Timeframe Settings

• Auto-Align HTF: Automatically determines the higher timeframe for divergence analysis based on the current chart.
• Show HTF Box: Displays visual boundaries for the higher timeframe periods on the CVD pane.

Table & Colors

• Show Table: Toggles the on-screen information table.
• Bullish/Bearish Color: Customizes the colors for CVD candles and signals.

FAQ

How do I access CVD Divergences?

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 the two detection methods?

The "Alignment with HTF Sweep" method filters for cleaner, high-probability setups that align with higher timeframe structure, while the "All" method displays every detected divergence regardless of context.

Why do I need High Precision CVD?

Standard CVD is calculated once per bar. Enabling High Precision uses sub-bar data (e.g., 1-minute data on a 15-minute chart) to see exactly how volume fluctuated within the candle, leading to more accurate divergence detection.