📊 Cumulative Volume Delta (CVD)📍 CVD describes the number of contracts bought at the offer minus those sold at the bid. It simply measures the "aggressiveness" of buyers versus sellers. If the sellers are aggressive, they place limit orders instead of market selling and vice versa. CVD is the easiest method to use delta in your trading.
🔹UPTREND EXHAUSTION
Price is making new highs but CVD isn't. This shows a lack of interest coming from aggressive buyers who would be needed to continue the price increase. We can expect a short term reversal to the downside.
🔷UPTREND ABSORPTION
CVD is making new highs but price isn't. This shows that there is a lot of activity from aggressive buyers trying to push the price higher but their market buy orders are getting absorbed by limit sell orders.
🔷DOWNTREND EXHAUSTION
Price is making new lows but CVD isn't. This shows a lack of interest coming from aggressive sellers who would be needed to continue the price decrease. We can expect a short term reversal to the upside.
🔷DOWNTREND ABSORPTION
CVD is making new lows but price isn't. This shows that there is a lot of activity from aggressive sellers trying to push the price lower but their market sell orders are getting absorbed by limit buy orders.
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