It is an approximation of the Cumulative Delta that is usually based on differences between market and limit orders, but because that data is not available, this indicator allocates a portion of the of a candle to the "upward" and "downward force" of each candle.
The upward force of a "Buy" candle is calculated by the High-Low
The downward force is calculated by (High-Close)+(Open-Low)
"Sell" candles are calculated in the same way just opposite
Total force=up force + down force
Up approximation = candle * up force/total force
Down approximation = candle * down force/total force
The result is similar to OBV, but not exactly the same, and allows for a "candle size" which you can't get with .
I had never used a Cumulative Delta indicator before, but when I started using it myself, it proved very effective when there was a deviation from price. It was also very effective in my opinion when was added to assess the standard deviation of the CDV compared to the of price and looking for areas where the CDV reaction to hitting or getting close to the BB was different.
I hope you find it useful! Of course, it comes with no guarantee of profits or any investing advice whatsoever.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in a publication is governed by House Rules. You can favorite it to use it on a chart.