Cumulative Delta Divergence: What It Shows and What It Misses
Calculate cumulative volume delta, understand reset and classification differences, and evaluate divergence without assuming a reversal must follow.
By OrderMap Research4 min read
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CVD is an accumulated classification
Cumulative volume delta, usually CVD, adds ask-classified volume minus bid-classified volume from a chosen starting point. It summarizes the imbalance of classified aggressive trading. It does not measure the net number of shares or contracts bought by the market, because every trade has both sides.
For three invented bars with delta of positive 200, negative 50, and positive 100, CVD progresses from zero to 200, 150, and 250. Reset the series before the third bar and the displayed number becomes 100 instead. The transactions are unchanged; the reference point differs.
Sierra Chart's cumulative-delta documentation describes accumulation, session resets, and classification details. These configuration choices belong in any comparison between charts or vendors.
Define divergence before interpreting it
A common bearish divergence is a new price high without a new CVD high over the same comparison interval. A common bullish divergence is a new price low without a new CVD low. These are relative observations, not automatic reversal signals. The market can continue trending while divergence persists.
Choose which highs and lows count and how far apart they must be. A subjective pair of pivots selected after a reversal can make nearly any chart appear predictive. An objective rule might compare two predefined swing points or the current test with the prior session extreme. That rule is a research choice and should remain fixed during evaluation.
| Price and CVD relationship | Observation | Unresolved question |
|---|---|---|
| Price and CVD both rise | Aggressive buying accompanies advance | Will new prices remain accepted? |
| Price rises, CVD lags | Less net ask-side activity across the comparison | Is offer liquidity thinner or selling being absorbed? |
| Price falls, CVD improves |