Z-Score Volume with CVD Confirmation

25 Haz

Z-Score Volume with CVD Confirmation is a volume-based confluence tool that enhances traditional volume analysis by combining Z-Score volume anomalies with Cumulative Volume Delta (CVD) confirmation. This indicator helps traders identify unusual volume activity that aligns with directional order flow, offering a cleaner signal for potential breakout or reversal scenarios.

🔍 Key Features:
Z-Score Calculation: Measures how extreme current volume is relative to its recent average, highlighting statistically significant surges or drops.

CVD Confirmation: Uses Cumulative Volume Delta candles (open/high/low/close) to assess buying vs. selling pressure in lower timeframes.

Bar Color Logic:

Green: High Z-Score volume confirmed by CVD bullish candle

Red: High Z-Score volume confirmed by CVD bearish candle

Other color bands show progressively strong or weak volume outliers

Real Volume Bar Heights: Volume bars retain true scale while color reflects underlying order flow strength and direction.

💡 Use Cases:
Breakout validation: Confirm price range breaks when volume surge is supported by CVD direction

Fade setups: Detect unsustainable high-volume moves lacking CVD support

Trend continuation: Spot momentum when both Z-Score and CVD align in the direction of the trend

⚙️ How to Use:
Adjust the Z-Score length to define how far back to measure average and deviation.

Select your anchor timeframe (typically 1D) and a lower timeframe for CVD calculations (e.g., 1-minute).

Use color-coded volume bars to assess volume significance and directional flow at a glance.

Add the standard volume indicator to the chart so one can compare the difference between the standard volume indicator and the Z-Score Volume with CVD Confirmation script. Useful at specific price levels and exiting ranges or not.

8 Tem

Sürüm Notları

Up dated script, added a line representing CVD.
The Z-Score Volume with CVD Confirmation and Color-Changing CVD Line can help you make informed decisions at key price levels by combining:

Statistically significant volume surges (Z-score),

Directional bias (via CVD), and

Momentum shifts (via color changes on the CVD line).

🔍 Key Components Recap:
Signal Meaning
Z-Score ≥ 2 Volume is significantly higher than average → possible institutional interest.
CVD Up (Green Line) More aggressive buying (market orders lifting the ask).
CVD Down (Red Line) More aggressive selling (market orders hitting the bid).
Volume Bar Color Combines Z-Score & CVD to classify intent (bullish/bearish).
CVD Line Color Shift Detects real-time shift in buying/selling pressure.

📈 How to Interpret at a Key Support/Resistance Level
Let’s say price is approaching a support level:

✅ If the level is likely to hold (bullish signal):
Volume bar is green/teal/blue → shows increasing interest.

Z-Score ≥ 2 → high relative volume.

CVD Line is green and rising → buyers are absorbing the sell pressure.

You may also see CVD increasing while price stays flat → bullish divergence (hidden accumulation).

🚫 If the level is likely to fail (bearish signal):
Volume bar is red or maroon → selling interest surging.

CVD Line turns red and drops → sellers taking control.

Z-Score ≥ 2 and CVD falling → strong bearish conviction.

Price may break the level with expanding volume + red CVD line → breakdown confirmation.
Look for confluence with price structure:

Place horizontal levels at prior swing highs/lows, or institutional zones.

Use this indicator to validate whether the level is defended or attacked with real participation.