Supply & Demand: Cumulative Volume Delta Flow

The Supply & Demand: Cumulative Volume Delta Flow tool provides a sophisticated structural analysis environment by combining price-action Supply and Demand zones with integrated Cumulative Volume Delta (CVD) order flow. This allows traders to evaluate the strength and defense of market structures through real-time volume analysis embedded directly within price zones.

Usage

The script identifies structural zones based on price imbalances and enhances them with a CVD Polyline Wave. This visual representation allows for several analytical applications:

• Zone Validation: When price returns to a previously established Demand zone, a rising CVD wave and positive label indicate active buyer defense. Conversely, a falling wave in a Supply zone suggests aggressive selling is reinforcing the level.
• Absorption Detection: If price lingers within a Demand zone while the CVD wave makes lower lows, it suggests absorption, where sellers may be exhausting available buy orders, increasing the likelihood of a breakout.
• Targeting and Exit Logic: Traders can use the internal CVD flow to determine if a zone is likely to hold as a reversal point or if the momentum is strong enough to cause a breakout, aiding in take-profit and stop-loss placement.

Details

The indicator utilizes advanced logic to maintain chart clarity and technical relevance:

• ATR-Based Momentum: Breakouts are validated using a Momentum Multiplier. A zone is only formed if the breakout candle exceeds the recent Average True Range (ATR) by a specific factor, ensuring only high-conviction structural shifts are captured.
• Dynamic Mitigation: Zones are automatically removed when "failed." A Demand zone is deleted if price closes below its bottom, and a Supply zone is deleted if price closes above its top.
• Overlap Protection: The algorithm filters redundant zones. If a new zone forms over an existing one, the script manages the overlap to prevent visual clutter.
• CVD Polyline Engine: The wave oscillates within the zone boundaries based on cumulative volume delta calculated since the zone's inception, providing a "live" look at the order flow dynamics inside the structure.

Settings

Detection

• ATR Length: Sets the period for the Average True Range used in momentum calculations.
• Momentum Multiplier: Determines the required size of the breakout candle relative to the ATR for a zone to be valid.
• Max Active Zones Each: Limits the number of active supply and demand zones displayed on the chart.

Colors

• Demand/Supply Zone Color: Adjusts the background fill of the zones.
• Demand/Supply Border: Sets the color of the zone boundaries.
• CVD Wave Colors: Customizes the color of the polyline wave representing volume flow.

Display

• Show Signals: Toggles the visibility of the "△" and "▽" markers at the point of breakout.

FAQ

How do I interpret the CVD wave inside the box? A rising wave indicates net buying volume within the zone, while a falling wave indicates net selling volume. The numerical label provides the exact cumulative delta value.

Why do some zones disappear? The tool uses dynamic mitigation logic. If price closes through the "invalidated" side of a zone (the bottom of demand or the top of supply), the zone is removed as it is no longer considered active support or resistance.

How can I access Supply & Demand: Cumulative Volume Delta Flow? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.