Order flow & CVD
Price tells you where the market is. Order flow tells you who is pushing — aggressive buyers or aggressive sellers. Cumulative Volume Delta (CVD) turns that pressure into a single line you can read at a glance.
Aggressive vs passive: the delta
Every trade has a maker (resting order) and a taker (the one who crosses the spread to fill it). The taker is the aggressor. Order-flow tools classify each trade by who was aggressive:
- A trade that lifts the ask = aggressive buy.
- A trade that hits the bid = aggressive sell.
The delta over a period is simply aggressive buy volume − aggressive sell volume. Positive delta = buyers were leaning in; negative = sellers were.
What CVD adds
Cumulative Volume Delta is the running total of that delta over time. Plotted as a line, a rising CVD means aggressive buyers are persistently in control; a falling CVD means sellers are. It distills the trade tape into one trend you can compare against price.
The signal traders watch: divergence
CVD is most useful when it disagrees with price:
- Price makes a new high, but CVD does not — the rally is running on thinning aggressive buying. Momentum may be fading; a pullback becomes more likely.
- Price makes a new low, but CVD turns up — sellers are pushing but buyers are absorbing them. A bounce or reversal can follow.
This absorption — heavy aggressive volume that fails to move price — often marks where large passive players are quietly filling on the other side.
How to use it (carefully)
- Treat CVD as confirmation, not a standalone trigger. Combine it with the order book, levels and trend.
- Divergences resolve on their own schedule — they signal pressure, not exact timing.
- Context matters: CVD around a big funding flush or a liquidation cascade behaves differently than in a calm range.