Mastering Change in State of Delivery (CISD) in Trading: A Step-by-Step Guide with Pine Script

Change in the State of Delivery (CISD) is a concept used in trading, particularly in volume profile analysis. CISD often refers to the shift in control from buyers to sellers or vice versa, typically identified through changes in volume, price action, and market structure. It can signal potential reversals or shifts in market trends. Here's how to identify CISD and implement it in Pine Script for use on TradingView:  

1. Understanding CISD in Trading Charts:

CISD Identification: Traders usually look for CISD by analyzing changes in volume at specific price levels (volume profile), shifts in market structure (higher highs to lower highs, or vice versa), and changes in momentum. Volume Clusters: Look for areas with significant volume at certain price points. A shift in volume from one price cluster to another can indicate a CISD. Price Action: Observe candlestick patterns or breakouts from ranges, which can indicate a shift in market sentiment. 

2. Implementing CISD in Pine Script:

Pine Script is a scripting language used to create custom indicators on TradingView. Here's a basic example to detect changes in volume and price action that might indicate a CISD:

pinescript
//@version=5
indicator("CISD Indicator", overlay=true)

// Parameters for Volume and Price Change Sensitivity
volumeThreshold = input.int(50000, title="Volume Threshold")
priceChangePercent = input.float(2.0, title="Price Change % Threshold", step=0.1)

// Calculate Volume Change
volumeChange = volume > volumeThreshold

// Calculate Price Change (percent-based)
priceChange = (close - close[1]) / close[1] * 100
isPriceChange = abs(priceChange) > priceChangePercent

// Determine CISD
cisdSignal = volumeChange and isPriceChange

// Plot signals on the chart
plotshape(cisdSignal, style=shape.triangleup, location=location.belowbar, color=color.green, size=size.small, title="CISD Detected")
plotshape(cisdSignal, style=shape.triangledown, location=location.abovebar, color=color.red, size=size.small, title="CISD Detected")

3. Explanation of the Script:

• Volume Threshold: Checks if the current bar's volume exceeds a predefined threshold.
• Price Change Threshold: Identifies significant price movements by calculating the percentage change from the previous close.
• CISD Signal: A combination of both volume change and price change, indicating a potential shift in market behavior.
• Visualization: Uses plotshape to display triangles above or below bars where a CISD is detected, helping visualize points of change on the chart.

4. How to Use the Indicator:

• Before to use this if you don't have charting account just click here to get free charting
• Adjust Parameters: Customize volumeThreshold and priceChangePercent to suit your trading style and the specific asset you're analyzing.
• Apply to Chart: Copy the script into TradingView’s Pine Script editor, save it, and add it to your chart.
• Interpret Signals: Look for the plotted shapes to identify where a potential CISD has occurred. These can signal shifts in market dynamics, potentially indicating reversal zones or changes in trend.

This script serves as a basic approach. Depending on your specific strategy, you might want to refine the conditions for detecting CISD, such as integrating volume profile data, adding moving averages, or using a more sophisticated price structure analysis.