Algorithmic Trading can be a complex subject. Keep your knowledge current with this glossary of key concepts, terminology, and technical indicators.
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.