1 October, 2016

Delta Strength

Rationale & Trading Techniques

Delta  – the difference in volume between trades transacted at the ask price and trades transacted at the bid price – is one of the key considerations in analysing order flow. Doing the formation of each price bar, Delta will rise and fall until the bar closes. The Delta Strength indicator provides an easy-to-read indicator showing the relative strength of the Delta at the close of the bar. An up bar with a closing positive Delta value of 200 when the maximum Delta value achieved in the bar was 1500 is a very different proposition to an up bar whose closing Delta Value was 1495 vs a maximum Delta value of 1500.

Delta Strength allows the trader to set a threshold percentage to show strong positive or negative Delta conditions. For example, only indicate when the bar’s closing Delta is greater than or equal to 90% of the maximum or minimum Delta experienced during the bar.


Examples

Note the three bars from 10:55:03 all exhibited a Delta Strength condition after rejection one tick below the Open that had been previously tested at 10:22:22:

Delta Strength symbol - Emoji Trading Order Flow Suite

 

A numeric display of Delta Strength (subgraph 1):

Delta Strength numeric - Emoji Trading Order Flow Suite

 


Delta Strength Settings

 

Input Name Description
Symbol Offset (Ticks) Specifies the indicator’s display position above/below the current bar.
Symbol Position Specifies whether the indicator is displayed:

  • relative to the bar’s Delta: below a positive Delta bar and above a negative Delta bar
  • relative to the bar: below up bars and above down bars
  • above the bar
  • below the bar
Delta Strength Threshold % The percentage threshold above which the Delta Strength indicator will be displayed.

 


Indicator Subgraphs

ID Subgraph Description
SG1 Delta Strength % The value of the bar’s final Delta value as a percentage of the bar’s maximum Delta (for positive final Delta) or minimum Delta (for negative final Delta). 
SG2 Delta Strength Threshold Breach Condition Evaluates to 1 for a breach of the Delta Strength Threshold %, 0 otherwise
SG3 Delta Strength Indicator Settings for the indicator drawn to who’s Delta Strength Threshold Breach conditions.
SG4 Delta Divergence Snapshot Select the color used to highlight Delta Divergence conditions within the Delta Snapshot subgraph.