Delta and cumulative volume delta (CVD)

What it is

Delta is the volume bought at the ask minus the volume sold at the bid, for one bar. A positive delta means aggressive buyers outweighed aggressive sellers. Delta % is delta divided by the bar's total volume.

Cumulative volume delta (CVD) is the running total of bar deltas, usually reset at the start of each session. Rising CVD means buyers have been the more aggressive side over the session.

A divergence is when price makes a new high but CVD doesn't (or a new low that CVD doesn't confirm), suggesting the aggressive side is running out or being absorbed. Divergences can last a long time and often fail, so they're a warning, not an entry. Delta needs tick data with the aggressor side; on spot forex, any CVD is built from candles and is only a rough proxy.

How to spot it

• CVD is drawn as a line under price.
• Compare its swing highs and lows with price's.

How to use it

• At a key high, a higher high in price with a lower high in CVD supports looking for a short once structure breaks.
• In a healthy trend, CVD moves with price; use it as confirmation.

Common mistakes

• Shorting every divergence as soon as it appears.
• Comparing CVD across sessions without noticing that it resets.

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