CVD is a volume-based indicator that helps analyze buying and selling pressure in the market. It tracks the difference between buying volume and selling volume, showing whether the market is being accumulated or distributed.
How CVD Works Volume Delta Calculation: If price closes higher than the previous bar → Volume is added to CVD (buying pressure). If price closes lower than the previous bar → Volume is subtracted from CVD (selling pressure). CVD Cumulative Calculation: Keeps a running total of volume delta over time. If the CVD line is rising, buyers are in control; if falling, sellers dominate. Moving Average on CVD: A moving average (MA) smooths out the CVD line, helping identify trends more clearly. Common choices: EMA (Exponential MA) or SMA (Simple MA).