Cumulative Volume Index - CVI

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DEFINITION of 'Cumulative Volume Index - CVI'

A momentum indicator that gauges the movement of funds into and out of the entire stock market by adding the difference between advancing and declining stocks to a running total.

INVESTOPEDIA EXPLAINS 'Cumulative Volume Index - CVI'

By showing the direction of volume flow, the CVI is very similar to OBV. The difference between the two indicators is in the actual methods of calculation. CVI uses actual up and down volume statistics while OBV generalizes the closing prices of a particular security.

CVI can be useful in determining the overall trend and its starting point. Any divergences between the CVI and the market index are indicators of a future correction.

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RELATED FAQS
  1. Why is the Cumulative Volume Index (CVI) useful for traders?

    Technical traders use the cumulative volume index (CVI) as a market breadth indicator. The index is based off of the relationship ... Read Full Answer >>
  2. What is the Cumulative Volume Index (CVI) formula and how is it calculated?

    Traders use the cumulative volume index (CVI) to gauge market momentum though the difference between descending stocks and ... Read Full Answer >>
  3. How do I build a trading strategy using the Cumulative Volume Index - CVI?

    Trading strategies that use the cumulative volume index (CVI) rely on its ability to gauge market breadth and momentum. In ... Read Full Answer >>
  4. What is the difference between technical analysis and fundamental analysis?

    Fundamental analysis and technical analysis are distinct methods used to research and evaluate securities. Fundamental analysis ... Read Full Answer >>
  5. How are Tweezer patterns interpreted by analysts and traders?

    The tweezer is a very common candlestick pattern. Theoretically, this pattern is an indication that the current trend has ... Read Full Answer >>
  6. What is the difference between a drawdown in banking and a drawdown in trading?

    The term "drawdown" appears in both the banking world and in the arena of trading, but it has completely different meanings ... Read Full Answer >>
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