CVD (Adam) Flashcards
why Cumulative Volume Delta?
Volume Delta meaning.
CVD example
Cumulative Volume Delta participants
Locals and other timeframe participants.
Meaning of positive and negative
CVD
How to use CVD?
CVD analogy with fuel. Example1
Analyze delta relative to price movement!
Compare to previous swing high/low.
Running out of steem(fluel) to keep goin in the same direction. ☝️
CVD analogy with fuel. Example2
Swing high, then price pushes back down. Wait for good entry level.
Fuel (volume) was enough to push price back to previous swing high.
THIS IS TO WATCH!
This move can keep continue going up despite fuel empty (as managed to reach previous swing level) ☝️
CVD
Exhaustion and Absorption
CVD exhaustion example
Price makes here new highs, but Delta fails to make new highs!
Price rallied bit local not interested in taking the offer any more. (Could be e.g. a giant other timeframe participant waiting with offer or limit order up there to sell. ☝️locals are exhausted, sell off starts )
CVD absorption example
Price fails to make new lows.
Delta makes new lows (breaks previous swing low). Buyers absorbing the selling pressure. Other timeframe participants are stepping in, the bids getting liquid. The selling pressure locals can’t take to new lows. 💥locals are short term, as price goes up, they puke out their positions. 👉 Exhaustion and Absorption becomes really useful in trade management👈
If longing, watch CVD that locals puke out their position, until the precious swing high at CVD chart {that would be 1st. profile target; doesn’t mean to close position! }
CVD summary quick view:
- best time frames?
- purpose/tool for?
- managing?
…
Practice spotting divergences: absorption and exhaustion; 👉TRY to watch how long to hold and exit a position 👈 e.g. if have absorption, look for delta to get back to that swing high before looking to exist position.
