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.

BREAKING DOWN '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 On-Balance Volume (OBV) important for traders and analysts?

    Discover reasons why the on-balance volume momentum indicator has become one of the most widely used and trusted tools of ... Read Answer >>
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  3. How do I build a trading strategy using the Cumulative Volume Index - CVI?

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