CVD Divergence Pro [Plazo Sullivan Roche Capital]

CVD Divergence Pro+ — Institutional-Grade Smart Money Divergence Engine
Version: 2025.10

Platform: TradingView (Pine Script v5)

⚙️ Core Logic Overview

The CVD Divergence Pro+ is an institutional-grade divergence detector that merges Cumulative Volume Delta (CVD) flow analytics with Smart Money Concepts (SMC) and ICT structure logic.

Instead of plotting noisy histograms, the indicator isolates buy/sell exhaustion points where price action diverges from aggregated buying/selling pressure across multiple data venues.

It integrates:

CVD-based Divergence Detection
Multi-Venue UltraData Volume Aggregation
High Time Frame (HTF) Bias Filters
ATR Regime Gating
Session Gating (London/NY)
VWAP Consensus Gate (D/W/M)
Cooldown & Phase Confirmation
Visual Dashboard & VWAP Badge

🔍 Algorithmic Foundation

1. CVD Engine

Calculates the delta between buying and selling pressure:
This quantifies which side dominates — buyers (positive delta) or sellers (negative delta).

2. Divergence Detection

The script identifies bullish and bearish divergences between price fractals and the CVD histogram.

Bullish Divergence: Price makes lower lows while CVD makes higher lows.
Bearish Divergence: Price makes higher highs while CVD makes lower highs.

The algorithm uses a dynamic window (n) to detect local pivot highs/lows.

3. Phase Confirmation

After divergence detection, CVD must sustain a phase shift (positive → negative or vice versa).
This ensures signals appear only when momentum alignment confirms the move.

4. High Time Frame Bias Filter

Optionally filters signals based on:

H4 EMA200 (for macro trend bias)
H4 EMA20 + Daily SMA50 (for shorter-term structural bias)

Prevents counter-trend trades unless intentionally bypassed.

5. ATR Regime Gating

Filters low-volatility markets using ATR as % of price.
Example: ATR < 0.10% = “quiet market,” signals suppressed to prevent chop.

6. Session Gating

Signals only appear within user-defined sessions (London or New York).

Ideal for scalpers or intraday traders optimizing liquidity windows.

7. VWAP Consensus Gate

Anchored VWAPs from Daily, Weekly, and Monthly frames are computed live.
The system checks how many frames are bullish (2/3 = bullish consensus).

This creates a market alignment filter for precision timing.

8. Cooldown Mechanism

Prevents rapid consecutive trades during volatility bursts.
Each signal starts a cooldown timer (default: 10 bars).

💡 Best Usage Practices

1. Intraday Scalping

Sessions: Enable London and New York.
HTF Mode: H4 20 + D50 (faster reaction).
ATR Filter: Keep ≥ 0.10%.
VWAP Gate: ON — only take signals aligning with VWAP consensus.
Goal: Trade exhaustion reversals near liquidity zones or imbalance closures.

2. Swing & Position Trading

Sessions: Disable session gating.
HTF Mode: H4 200.
VWAP Gate: ON — filter false counter-trend divergences.
ATR: Lower filter (0.05%) to catch early shifts.

Goal: Catch institutional shift patterns on Daily → H4 transitions.

3. Multi-Venue Validation (for FX/Commodities)

UltraData: Enable with multiple brokers (OANDA, FX_IDC, FOREXCOM, etc.).
Provides aggregated CVD flow that mimics interbank liquidity footprint.
Goal: Reduce venue bias — more accurate delta divergence from real liquidity.

4. Confirmation Layer Setup

Combine with:

Trend Shift AI or Institutional Raid & Reversion Strategy indicators.
Use CVD Divergence Pro+ as confirmation — not the trigger.
When both align (divergence + structure break), expect institutional entries.

🧠 Pro Tips

Disable ATR Filter during high-impact news (NFP, CPI) for volatility bursts.
Cooldown: Increase to 20–30 bars for swing systems.
VWAP Consensus: Use 2/3 bullish for longs, ≤1 bullish for shorts.
Use on M15–H1 charts for optimal liquidity and signal clarity.

Avoid using on very low liquidity assets (e.g., micro-caps, exotic pairs).


⚠️ Risk & Optimization Notes

Do not overfit filters; use defaults first.

Backtest across sessions and assets to identify where divergence signals precede large impulse candles.

Combine with liquidity-based visual cues: FVGs, Order Blocks, or Liquidity Raids for optimal trade confluence.

📈 Example Trade Flow (Ideal Scenario)

H4 bias = Bullish
Daily/Weekly VWAP > price
ATR% OK, Session = London
Bullish divergence appears (+RD)
CVD Phase = BullOK
VWAP consensus ≥ 2
Table reads “READY” → Execute
Next 5–10 candles show strong bullish impulse (entry validated)

🏁 Conclusion

The CVD Divergence Pro+ is engineered as a quant-grade sentiment synchronizer — fusing price, volume, and time into a single divergence intelligence layer.

When combined with liquidity theory and structure-based execution, it delivers some of the most precise institutional-grade reversal timing available in discretionary or algorithmic trading.