Tradingview Volume Delta & CVD | Guide

Summary

In this video, the presenter discusses TradingView's new Volume Delta and Cumulative Volume Delta (CVD) indicators, offering insights into their usage and providing alternative strategies. The focus is on how to identify trap Delta within candles, using wicks and swings in Delta for potential reversals. The presenter compares TradingView’s tools to EXO charts, emphasizing their limitations and suggesting improvements. Additionally, he highlights how to interpret buy-sell volume, making decisions based on quantifiable data. The video is a practical guide for traders to understand and apply these indicators in their strategies.

Takeaways

• 😀 Volume Delta and Cumulative Volume Delta (CVD) are key indicators for analyzing market volume and identifying potential reversals in trading.
• 😀 The Volume Delta indicator shows the difference between buying and selling volume within a specific time frame, providing insight into market participation.
• 😀 Focus on the wicks of delta bars, as they can reveal trapped volume (trap Delta), which is crucial for identifying possible reversals.
• 😀 Trap Delta occurs when buying or selling volume is trapped within a candle, which could signal a price reversal in the market.
• 😀 The CVD indicator accumulates delta values throughout the trading day, offering a clearer view of market trends by tracking total buying and selling pressure.
• 😀 CVD divergences, such as when more selling occurs but the price doesn’t break previous lows, can indicate potential absorption by limit buy orders.
• 😀 Using TradingView’s visualizations can be useful, but it lacks detailed, quantifiable data compared to other tools like EXO charts.
• 😀 The Volume Sweep by Leviathan is an advanced tool that provides a more detailed analysis, including buy/sell volume and delta values, which can help traders make informed decisions.
• 😀 Traders should focus on understanding the context of volume shifts and not solely rely on indicators like Volume Delta or CVD for making trading decisions.
• 😀 While TradingView’s indicators are helpful, advanced users might benefit from platforms that offer more granular data, such as EXO charts, for more accurate trade execution.

Q & A

What is the main focus of this video?

The main focus of the video is to explore TradingView’s new Volume Delta and Cumulative Volume Delta (CVD) indicators, along with insights on how to use them in trading. The video also presents alternatives and recommendations to enhance trading strategies.

How does the Volume Delta indicator work in TradingView?

The Volume Delta indicator shows the difference between buying and selling pressure within a specific candle, represented by Delta bars at the bottom of the chart. It helps identify market sentiment based on volume but can be more insightful when focusing on the Wicks of the Delta bars, which may indicate trapped Delta and potential reversals.

What is the significance of the Wicks in the Delta bars?

The Wicks in the Delta bars represent where the buying or selling pressure occurs within a candle. If a candle has a large Wick at the top or bottom, it indicates that a significant amount of buying or selling pressure may have been 'trapped', which can be an early signal for a potential reversal.

What does it mean when the Delta is trapped within a candle?

When Delta is trapped within a candle, it means that the buying or selling pressure during the formation of the candle did not align with its final close. For example, if there is more buying at the top of the candle but the candle closes with negative Delta, the buying pressure is considered trapped, which can signal a reversal.

How can the Cumulative Volume Delta (CVD) be useful in trading?

Cumulative Volume Delta (CVD) tracks the accumulation of Delta over a defined period, such as a day. It helps traders understand the overall market sentiment and whether buying or selling pressure is building. For example, a rise in CVD while price is dropping can indicate absorption, where larger market participants are holding the price at certain levels.

What is the importance of looking at CVD divergences in trading?

CVD divergences are important because they can reveal when price and volume are not aligning. For instance, if there is more selling at a certain price level but the price is unable to break lower, it suggests that someone is absorbing the selling pressure, which could indicate a potential reversal or support level.

What are the limitations of TradingView’s Volume Delta and CVD indicators?

The limitations of TradingView’s Volume Delta and CVD indicators include their reliance on visualizations, which may not always provide the precise data needed for accurate decision-making. Unlike more advanced tools like EXO charts or Leviathan, TradingView doesn’t offer detailed metrics like Delta Max or specific session breakdowns, which can make it harder to execute precise trades.

Why is it recommended to use EXO charts or Leviathan as alternatives to TradingView’s indicators?

EXO charts and Leviathan offer more advanced features, such as precise Delta Max, Delta Min, and detailed volume analysis. These tools provide exact numerical data on market pressure, which allows traders to make more informed and accurate trading decisions, as opposed to relying solely on visualizations in TradingView.

What is the main difference between TradingView’s Volume Delta and the Volume Sweep by Leviathan?

The main difference is that the Volume Sweep by Leviathan shows more advanced volume analysis, including buying and selling pressure over time, while TradingView’s Volume Delta is simpler and focuses on the Delta bars without detailed breakdowns. Leviathan’s tool provides additional features such as CVD and relative volume, which enhance the depth of analysis.

How can traders improve the effectiveness of their trades using Volume Delta and CVD?

Traders can improve the effectiveness of their trades by closely monitoring the Wicks of Delta bars to identify trapped Delta, looking for absorption patterns in CVD, and combining these insights with other technical indicators to confirm potential reversals or trend shifts. Using tools like EXO charts or Leviathan can provide more detailed and quantifiable data for better decision-making.