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How Order Flow Delta Can help your Trading?
How To Use Delta In Your Trading
Delta is an important part of order flow trading. Delta is
the difference between the volume bought from the offer and the volume bought
from the bid.
It will either be positive or negative and in rare
coincidental instances it may even be zero. I say coincidental because it is
often just luck that the delta finishes at 0.
So what is the importance of delta?
Well, there are a few ways to interpret the delta. On a per
bar basis it will tell you the strength of the buying or selling in a
particular bar. If the delta is a big positive number it tells you aggressive
buyers were in control of the bar. If the delta is a big negative number it
tells you aggressive sellers were in control of the bar.In an up market the
aggressive buyers should be in control.In a down market the aggressive sellers
should be in control.
When a market turns from a demand driven market to a supply
driven market the delta can show that to you as it is happening. In other words
when a market is rally because of strong demand, once the demand starts to wane
and supply takes over, the market sells off and prices drop.When a market makes
a bottom the opposite is true.
Look for delta to become positive and the market to move
away from the low. For a market to move higher aggressive buying needs to come, traders need to be lifting the offers. This will show
up in the delta.
If you are just following a regular bar or candlestick chart
you are not getting a complete picture of what is happening in the market. What would you rather do? Look at a chart that isn’t giving
you all the pieces to the trading puzzle or look at a chart that is screaming at you “hey idiot, demand is taking over from supply, don’t
miss the move!”
There is more to delta than meets the eye. If you are not
using it in your trading, you really owe it to yourself to start looking at it
and understanding it. (Courtesy - Mike)
My Mentor's (Michel Valtos) Trading Statement $2500 Account Size makes $1000 on 4 Trading Days
Michel Valtos - Developer of Order flow Trading Course,
Professional Institutional Trader, Founder of
orderflows.com,
have been trading for banks (JP Morgan and Commerzbank) as
well commodity trading houses (Cargill and EDF Man) and for myself. He created
orderflows.com to help traders understand and profit with order flow.
In 2013 at the age of 44 he left JP Morgan and decided to
trade for himself based on what I had learned along the way. The Futures
industry has changed for the retail trader. Commission are now very low, real
time data is not expensive and computers are cheap.
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| Michel Valtos |
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