T2W Bot

Staff member
1,436 49
Whilst I generally shudder when I recall my first naïve steps in the world of trading and the hoard of indicators I had on my charts, there is one indicator I feel stands apart from the rest. It’s not based on price and so represents an additional dimension on which to make decisions.  I also think it is a very close relative of tape reading. In this article, we will look at some of the basics of using Cumulative Delta.
The Delta Theory Simplified
For a trade to occur in the markets, we need two things – a buyer and a seller. Price does not move down because there are more buyers than sellers. This is impossible, for every buyer there must be a seller. Price moves down when sellers are aggressive and buyers believe that sellers are willing to settle for a lower price. After all, why buy for $10 when you think you’ll be able to buy for $9 later?
Not all buyers and sellers are equal. For example, liquidity providers get paid to buy and sell using limit orders. Some...
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aussiepearson

Newbie
2 0
Now I get it!!

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!
 

FulcrumTrader

Junior member
40 3
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. :)
 

FulcrumTrader

Junior member
40 3
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.
 

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yiehom

Active member
141 2
Anyone know a delta indi for MT4 ?
Thanks
 

bootsyjam

Active member
219 19
Hi yiehom,
Am afraid I don't actually know what all that stuff is that you talk about (GC etc).
If you do some research you will find out there is no central volume data for the fx market. Any volume study on spot fx might just be the vol enacted via your broker. Which won't mean a lot as none of the big boys will be using your broker so you won't see what they're doing, and that's what it's all about...
 

yiehom

Active member
141 2
gc=gold

Hi yiehom,
Am afraid I don't actually know what all that stuff is that you talk about (GC etc).
If you do some research you will find out there is no central volume data for the fx market. Any volume study on spot fx might just be the vol enacted via your broker. Which won't mean a lot as none of the big boys will be using your broker so you won't see what they're doing, and that's what it's all about...