Understanding Cumulative Volume Delta (CVD) and Delta in Trading
Powerful concepts for analyzing market order flow and volume to make better-informed trading decisions.
Delta
The building block of CVD
Delta measures the difference between aggressive buy and sell orders within a specific time period. It tells us who is in control—buyers or sellers.
Delta = Market Buy Volume − Market Sell Volume
Cumulative Volume Delta (CVD)
The bigger picture of market sentiment
CVD is the running total of Delta over a specified period. It adds up all the Delta values over time to give traders a bigger picture of market sentiment.
Example: Day 1 (+20) + Day 2 (-10) + Day 3 (+30) = CVD of +40
Why These Indicators Matter
Key benefits for traders
- Spot who is in control (buyers or sellers)
- Identify hidden absorption or imbalances
- Confirm trends and breakouts
CVD vs. Delta: What's the Difference?
| Feature | CVD (Cumulative Volume Delta) | Delta |
|---|---|---|
| Measures | Running total of buy vs. sell volume over time | Buy vs. sell volume in a specific period |
| Helps Identify | Long-term buying/selling pressure | Short-term order flow imbalance |
| Usage | Detect divergences and confirm trends | Analyze momentum and order flow shifts |