delta: a clear understanding a thread 🧵
Luckshury@Luckshuryy
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Apr 23, 2025
~2 min read
1
delta: a clear understanding
a thread 🧵
a thread 🧵
2
what is delta:
in trading "delta" is the difference between the sells & buys.
there are 2 common ways to watch delta:
1) traditional bottom row indicator which tells you the delta on a per candle/time basis. (like the cover image)
2) footprint chart which shows a per price view & time view of delta. meaning you can view at which time the delta came in & which price.
Identifying delta per price I find to be more valuable.
positive delta - more market buyers
negative delta- more market sellers
example ↓
in trading "delta" is the difference between the sells & buys.
there are 2 common ways to watch delta:
1) traditional bottom row indicator which tells you the delta on a per candle/time basis. (like the cover image)
2) footprint chart which shows a per price view & time view of delta. meaning you can view at which time the delta came in & which price.
Identifying delta per price I find to be more valuable.
positive delta - more market buyers
negative delta- more market sellers
example ↓
3
when to look at delta:
- resting liquidity
- high volume nodes
- point of controls
- other horizontal s/r levels
upon price breaking range high/lows there has the potential to be excess delta left behind for false breaks.
example ↓
- resting liquidity
- high volume nodes
- point of controls
- other horizontal s/r levels
upon price breaking range high/lows there has the potential to be excess delta left behind for false breaks.
example ↓
4
trapped delta:
my most common setup is identifying the candle in which puts the spike in delta.
once, the excess delta is placed into an offside position I look for mean reversion, with that excess delta positioning reversing their positions.
example - shorts caught offside, start closing ↓
my most common setup is identifying the candle in which puts the spike in delta.
once, the excess delta is placed into an offside position I look for mean reversion, with that excess delta positioning reversing their positions.
example - shorts caught offside, start closing ↓
5
cumulative volume delta (cvd):
uses a combination of (price + delta) to identify absorption in price.
I prefer to use this on lower time frames only, alongside breaks of structure to enter on signs of strength/weakness.
bullish cvd - price makes higher low & cvd makes lower low
bearish cvd - price makes lower high & cvd makes higher high
bullish example & where I would enter ↓
uses a combination of (price + delta) to identify absorption in price.
I prefer to use this on lower time frames only, alongside breaks of structure to enter on signs of strength/weakness.
bullish cvd - price makes higher low & cvd makes lower low
bearish cvd - price makes lower high & cvd makes higher high
bullish example & where I would enter ↓
6
delta max/min (advanced):
delta max/min can be used to track intra candle swings in delta.
delta minimum - the lowest point the delta reached before candle close
delta maximum - the highest point the delta reached before candle close
delta - the final delta upon candle close
example of positive delta at the highs causing trapped delta ↓
delta max/min can be used to track intra candle swings in delta.
delta minimum - the lowest point the delta reached before candle close
delta maximum - the highest point the delta reached before candle close
delta - the final delta upon candle close
example of positive delta at the highs causing trapped delta ↓
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Thanks for reading and I hope you found this valuable, leave a like if you did find it useful.
Let me know any questions you have below and any further topics you would like covered.
software I use for delta:
- Exocharts (footprint)
- Velo data (regular charts)
Let me know any questions you have below and any further topics you would like covered.
software I use for delta:
- Exocharts (footprint)
- Velo data (regular charts)