Cumulative Volume Delta (CVD) Indicator for MT4/MT5/cTrader

Cumulative Volume Delta (CVD) is an indicator for MT4/MT5/cTrader that is based on calculating the difference (delta) between buy and sell volumes to spot trend exhaustions early. The indicator calculates buy/sell volume difference over a given number of bars and presents it either in raw form or smoothed as a histogram. Green bars mean that there was more buy volume during the period while red bars mean that there was more sell volume. This CVD indicator is available for MT4, MT5, and cTrader.

In the MT4 and cTrader version of this Cumulative Volume Delta indicator, you can only use tick volume. In MT5, it is possible to switch to real volume if your broker provides real volume data.

Although it would be a stretch to call this CVD indicator a multi-timeframe one, it can draw buy/sell volume data from lower timeframes (which is a more accurate way to calculate Cumulative Volume Delta). This isn't always practical due to lower timeframe data availability issues. If you attach this indicator to a higher timeframe and select a very low source timeframe for volume data, it might not display anything useful. In that case, it is recommended to increase the source timeframe.

Input parameters

• Source timeframe for volume data: a lower timeframe to source price and volume data for the indicator's calculations. If a higher timeframe is given the current one will be used instead.
• Period for cumulative delta calculation: the size of the sliding window to cumulate the volume delta on.
• Smoothing method: the method for the smoothing moving average.
• Smoothing period: the period of the smoothing moving average.
• Volume type: can be either tick or real volume. This option is only available in MetaTrader 5 version of the indicator. Real volume is usually unavailable for Forex/CFD instruments.

Example

One of the most popular strategies for using the CVD indicator is to follow its divergences with the price chart. For example, the screenshot below depicts a divergence formed during the downtrend coming to exhaustion on a daily EUR/USD chart.

Even though its signals might seem tempting, when working with divergences, checking for confirmation signals is often a good idea. One of the best indicators for divergence confirmation is Supertrend.