Trading with the Cumulative Delta 'Indicator'

We've just published a new T2W article called "Trading with the Cumulative Delta 'Indicator'" by Peter Davies.

Quick Summary: Peter Davies explains the theory as well as the benefits and flaws of using Cumulative Delta as an aid to trading and how it can be used in conjunction with price action to improve decision making.

PS. Don't forget to rate the article after you've read it and share your comments on this thread.

Well described, an excellent introduction to a useful tool.

This article helped me understand some of the nuances of reading volume that I've been struggling with. Thanks for helping make some difficult concepts easy for the average person to grasp!

Several very critical uses for Cumulative Delta are tracking levels of "resting inventory" (potential support and resistance levels) and using the Delta as a proxy to track the real time "open interest" picture (this is HUGE!). Tracking for regular Delta Divergences is just a component of the entire capability of using Cumulative Delta. For instance, in the CL I find "hidden divergences" and "inventory grabs" are very important trade set ups....and in conjunction with know WHERE held inventory is located (what exact pricing levels) provides solid intraday context.

Another key aspect I use for tracking Delta is to ALSO measure the order book resistance (what are the "limit" orders doing in the order book as the "market order" driven order flow hits the order book)......this is critical at any trade entry determination point. This is why I always have 3 panes on all my current FulcrumTrader charts......PRICE.....DELTA......ORDER BOOK RESISTANCE.

Glad to see more are getting into the Cumulative Delta realm, since tracking order flow activities with price action is the perfect blend imo. After 8 years of tracking the Cumulative Delta in the futures markets I have never used anything else. :-)

The new style of price candlestick called PROX Bars has the inputs I mentioned above all within a color coded price candlestick (to simplify what a trader looks at while getting ready to take trades). Kyle from TrendScalping knows all about Delta order flow and order book resistance so I like this new approach for simplified charting.

how can I see Cumulative Delta ??

do all brokers offer this indicator?

Excellent, logical, well explained and informative article.

Much appreciated!