CTZ CVD Divergence
CTZ CVD Divergence Lines
A clean overlay indicator that draws divergence lines directly on your price chart using Cumulative Volume Delta as the confirmation engine. Unlike standard RSI or MACD divergence tools this indicator uses order flow — the actual balance of buying and selling volume behind each candle — to identify when price and market participation are disconnecting.
What it does
When price makes a higher high but CVD makes a lower high that is bearish divergence. Smart money is not participating in the push higher. They are selling into retail buying. The indicator draws a red line connecting the two swing highs on the price chart and labels it CVD Bear Div so you can see the divergence visually without looking at a separate pane.
When price makes a lower low but CVD makes a higher low that is bullish divergence. Smart money is not selling into the push lower. They are absorbing supply at the lows. The indicator draws a green line connecting the two swing lows and labels it CVD Bull Div.
How to use it
Step 1 add the indicator to your price chart as an overlay. It works on any symbol and any timeframe.
Step 2 watch for divergence labels appearing at swing highs and lows. A CVD Bear Div label at a known resistance level or the high of a range is a high probability short signal. A CVD Bull Div label at a known support level or the low of a range is a high probability long signal.
Step 3 combine with your other tools. Divergence lines are most powerful when they appear at a key structural level such as a previous high or low, a Fibonacci level, a breaker block or FVG zone, or the high or low of a multi week range. A single divergence label is a signal. A divergence label at a key level confirmed by order flow in the CTZ CVD and Gamma indicator is a high conviction trade.
Step 4 set your alerts. Use the Any alert function call option in TradingView to receive notifications when a bullish or bearish divergence forms. The alert message includes the symbol and the price level where the divergence occurred.
Settings guide
Swing lookback controls how many bars either side of a swing point the indicator uses to identify highs and lows. Default is 5. Lower values like 3 give more signals on faster timeframes. Higher values like 8 give cleaner signals on slower timeframes.
CVD comparison lookback controls how far back the CVD is compared at each swing point. Default is 5.
Min bars between divergences prevents the same divergence from firing multiple times in quick succession. Default is 3. Increase to 8 or more on higher timeframes to keep signals clean.
Normalisation lookback controls how the CVD is scaled internally. Default 100. Leave this at the same value as your CTZ CVD and Gamma indicator for consistent readings across both scripts.
Timeframe guidance
On the 1 hour chart this indicator is very responsive and will catch intraday distribution and accumulation patterns. Use swing lookback of 3 to 5.
On the 4 hour chart signals are less frequent and carry more weight. Use swing lookback of 5.
On the daily chart divergences are rare and extremely significant. Use swing lookback of 5 to 8. A daily CVD Bear Div at a multi month high is one of the strongest signals available from order flow analysis.
Important note
CVD divergence tells you that the participation behind a price move is weakening. It does not tell you exactly when price will reverse. Always use divergence as a confirmation tool alongside structural levels and your other indicators rather than as a standalone entry signal. The most powerful setups occur when CVD divergence, a key price level, and a zone from your liquidity analysis all align at the same point.
This indicator is part of the CTZ suite which includes CTZ Expected Move Suite for trade setup and risk management, CTZ CVD and Gamma for order flow analysis, and CTZ Liquidity and Structure Suite for zone and structure detection.
Indicador Pine Script®
