Delta Buy/Sell Volume

[FulcrumTrader]

Sorry if this a dumb question, but could someone please tell me how/when the delta candle bars trend up or down. What exactly does this represent? I understand that each bar represents the net delta of the bid/ask of the bar but how does this translate to an indicator bar moving up or down?

No problem.....the Cumulative Delta candlesticks show the realtime no lag plot of the intrabar delta correlated to each price candlestick. The Cumulative Delta (different than Intrabar Delta) takes all the intrabar Delta plots and accumulates there data in a succession of plotted candlesticks. The cumulative effect of that periods order flow bias is shown continually changing throughout the trade day, according to the ebb and flow of the buying or selling conviction within the traded order flow. Instead of resetting back to a zero reading at the end of each candlestick for the chart time frame set, the Cumulative Delta starts plotting each new Cumulative Delta candlestick where the last candlestick plot finished.....just like a price candlestick.

Here is some good reference material to learn about Cumulative Delta;

http://www.linnsoft.com/tour/techind/vb.htm

This second video is ok....but unfortunately they never do show the most powerful use of Delta information, the Cumulative Delta candlestick;

http://www.screencast.com/users/MarketDelta/folders/Support/media/09eef009-82e0-4405-9077-c4b22e95bfc1

[davewolfs]

No problem.....the Cumulative Delta candlesticks show the realtime no lag plot of the intrabar delta correlated to each price candlestick. The Cumulative Delta (different than Intrabar Delta) takes all the intrabar Delta plots and accumulates there data in a succession of plotted candlesticks. The cumulative effect of that periods order flow bias is shown continually changing throughout the trade day, according to the ebb and flow of the buying or selling conviction within the traded order flow. Instead of resetting back to a zero reading at the end of each candlestick for the chart time frame set, the Cumulative Delta starts plotting each new Cumulative Delta candlestick where the last candlestick plot finished.....just like a price candlestick.

Here is some good reference material to learn about Cumulative Delta;

http://www.linnsoft.com/tour/techind/vb.htm

This second video is ok....but unfortunately they never do show the most powerful use of Delta information, the Cumulative Delta candlestick;

http://www.screencast.com/users/Mark...7-c4b22e95bfc1

Thanks for those links and the explanation all very useful. One last question, with respect to the delta candles. What would the tails outside the body of the candle on the delta chart represent?

Edit: Ok this makes complete sense now. The candle for the Cumulative Delta Volume acts just as price would where the open of the bar represents the total Delta for that point in time and the high and low of the bar represent the min and max delta for that period of time. This is great, I trade price action and can definitely see how this would be beneficial as a guide to understand what is happening from time intervals that I might not be paying attention too, especially when bars price bars imply two sided trading is occurring.

For those who have been using this to aid with their trading are there any specific patterns that you look for, I could see how this would be especially beneficial when approaching specific swing areas or you are waiting for a move outside a trading range.

[FulcrumTrader]

Thanks for those links and the explanation all very useful. One last question, with respect to the delta candles. What would the tails outside the body of the candle on the delta chart represent?

Edit: Ok this makes complete sense now. The candle for the Cumulative Delta Volume acts just as price would where the open of the bar represents the total Delta for that point in time and the high and low of the bar represent the min and max delta for that period of time. This is great, I trade price action and can definitely see how this would be beneficial as a guide to understand what is happening from time intervals that I might not be paying attention too, especially when bars price bars imply two sided trading is occurring.

For those who have been using this to aid with their trading are there any specific patterns that you look for, I could see how this would be especially beneficial when approaching specific swing areas or you are waiting for a move outside a trading range.

"Price is Horsepower and Volume is Torque"

Paying attention to the conviction within the traded order flow is exceptionally important in many actions of price. I use Cumulative Delta on a macro scale to track accumulation of SHORT or LONG positions as commercial entities build positions of resting held inventory (real support or resistance zones.......S/R that is actually backed by someone with real resting inventory on the line). I also use Cumulative Delta on a micro scale to pick the moment of trade entry, as the order flow transitions into the intended direction of my trade signal.

Watching the Cumulative Delta for a few months, you will notice repeating patterns of commercial trade activity as price/volume reacts to various market events. Trading in alignment with the supply & demand of the market is a very logical approach imo versus the typical off the shelf indicator game.

[davewolfs]

"Price is Horsepower and Volume is Torque"

Paying attention to the conviction within the traded order flow is exceptionally important in many actions of price. I use Cumulative Delta on a macro scale to track accumulation of SHORT or LONG positions as commercial entities build positions of resting held inventory (real support or resistance zones.......S/R that is actually backed by someone with real resting inventory on the line). I also use Cumulative Delta on a micro scale to pick the moment of trade entry, as the order flow transitions into the intended direction of my trade signal.

If you watch the Cumulative Delta for a few months you will also notice repeating patterns of commercial trade activity as price/volume reacts to various market events. Trading in alignment with the supply & demand of the market is a very logical approach imo versus the typical off the shelf indicator game.

I couldn't agree more. Question for you, given that historical CVD is not available since there is no historical data support currently, what type of macro time frame are we talking about here? Or are you using another product that does support historical CVD?

Edit: I actually started looking at the eSignal API and I think that it might be possible to request this data historically. Has anyone considered this already?

[FulcrumTrader]

I couldn't agree more. Question for you, given that historical CVD is not available since there is no historical data support currently, what type of macro time frame are we talking about here? Or are you using another product that does support historical CVD?

Edit: I actually started looking at the eSignal API and I think that it might be possible to request this data historically. Has anyone considered this already?

My primary set-up is Inv RT Pro with DTN.IQ feed......once NT comes out with NT7 I will try and move more of what I am doing over to NT7.

[newninja]

hi guys,
Just a very quick question need your help. In the GomiCD indicator:

A volume bar with red color means volume decline, but does it also mean a "selling" volume?

Also, a volume bar with green color means volume increase or it also represents a "buying" volume? I am not sure, please help!

Thank you!

[FulcrumTrader]

hi guys,
Just a very quick question need your help. In the GomiCD indicator:

A volume bar with red color means volume decline, but does it also mean a "selling" volume?

Also, a volume bar with green color means volume increase or it also represents a "buying" volume? I am not sure, please help!

Thank you!

No, a red candlestick of Cumulative Delta means the selling conviction (or bias) increased.....sellers where in control of the traded order flow as the Delta plots red candlesticks (and just the opposite for green Cumulative Delta candlesticks). The Cumulative Delta candlestick plotted volume study DOES NOT count ALL VOLUME.....it is a parsed volume study that looks at bid - ask traded only volume flow (those who join the market with "market" orders).

Here is some additional explanation for you...... http://www.linnsoft.com/tour/techind/vb.htm

[newninja]

Thank you!
so when selling vol>buying vol, we will have a red bar which indicate selling pressure in control. correct?

In a cumulative delta chart, if the cumulative volume bar wave goes lower and lower, that means selling pressure is added up. is that right?

[FulcrumTrader]

Thank you!
so when selling vol>buying vol, we will have a red bar which indicate selling pressure in control. correct?

In a cumulative delta chart, if the cumulative volume bar wave goes lower and lower, that means selling pressure is added up. is that right?

It means selling pressure continues....the intrabar Delta plots strung together make up the Cumulative Delta study.

So you could say when "market" order selling > "market" order buying the CD will continue to plot lower (with red candlesticks).

[newninja]

Thank you so much! You just corrected a mistake in my mind!

Now a further question is : we should only pay attention to whether the cumulative delta chart is ABOVE OR BELOW the ZERO line, right? suppose a wave is below zero, we could only know selling pressure continues, but we can NOT tell if it is strengthened or weakened by analyzing where it is going as long as it stays below zero, it make difference only when it cross zero line. ( so the size of a candle stick is not so important? but what is the difference between a big red candle stick and a small red candle stick?)

So we should watch out, in a downtrend, a positive delta volume (above zero) or a negative delta volume (below zero) in a uptrend since these can indicate a potential trend reversal.

Please correct me if my understanding is wrong.
Thank you again!

It means selling pressure continues....the intrabar Delta plots strung together make up the Cumulative Delta study.

So you could say when "market" order selling > "market" order buying the CD will continue to plot lower (with red candlesticks).

[davewolfs]

Any chance of getting a screenshot of todays session using 5 minute bars?

[dosh1965]

50k short inventory at 1025, 20k short inventory at 1030, market blasting higher... CD may be the next best thing to sitting with the smartest guys in the room manipulating this market, but may not be good enough...

[FulcrumTrader]

Proper Cumulative Delta Tracking

50k short inventory at 1025, 20k short inventory at 1030, market blasting higher... CD may be the next best thing to sitting with the smartest guys in the room manipulating this market, but may not be good enough...

I was wondering why you were tracking the Cumulative Delta from the wrong levels?

1030 level is not any particular area that needs to be tracked, not at all. There is ways one must properly track zones of resting inventory and there are Delta Thresholds that need to be tracked for trade entry determinations. Tracking the Delta at the 1025 or 1030 area has no importance from today's trading.

You have to know how to use the Delta information or like any other aspect of trading the information is unusable to most.

[FulcrumTrader]

Thank you so much! You just corrected a mistake in my mind!

Now a further question is : we should only pay attention to whether the cumulative delta chart is ABOVE OR BELOW the ZERO line, right? suppose a wave is below zero, we could only know selling pressure continues, but we can NOT tell if it is strengthened or weakened by analyzing where it is going as long as it stays below zero, it make difference only when it cross zero line. ( so the size of a candle stick is not so important? but what is the difference between a big red candle stick and a small red candle stick?)

So we should watch out, in a downtrend, a positive delta volume (above zero) or a negative delta volume (below zero) in a uptrend since these can indicate a potential trend reversal.

Please correct me if my understanding is wrong.
Thank you again!

No...the zero line for the Cumulative Delta is nothing I ever track...not important. I have spent 6 years watching the Cumulative Delta so I know exactly what I need to track or not.

Spend several months watching the Cumulative Delta live each day and the patterns should start to show their hand....there are many!

[dosh1965]

I was wondering why you were tracking the Cumulative Delta from the wrong levels?

1030 level is not any particular area that needs to be tracked, not at all. There is ways one must properly track zones of resting inventory and there are Delta Thresholds that need to be tracked for trade entry determinations. Tracking the Delta at the 1025 or 1030 area has no importance from today's trading.

You have to know how to use the Delta information or like any other aspect of trading the information is unusable to most.

I believe you were looking at 1016 and 1035/8 as the price levels to watch. Price seems to consolidate today around 1025-1030 with CD going more negative. Do you consider that inconclusive until we either go to 1016 or 1035/8 again?