Delta is the difference in buying power (market orders lifting the ask) and selling power (market orders hitting the bid). A bar where more trades lifted the ask than hit the bid, i.e. more buying than selling power will have positive Delta and a bar with more selling than buying power, i.e. more trades hit the bid than lifted the ask, will have negative Delta.
Delta provides confirmation of price movements. With more buying than selling activity, a price rise will be accompanied by positive Delta. As buying activity slows and selling activity increases, negative Delta can be expected. It follows therefore that buying activity accompanied by negative or falling Delta is an indication of the possibility that price will pause or change direction.
The emoji trading Order Flow Suite Delta Divergence indicator signals when price reaches its daily, or a swing high or low if the Delta is opposite to, or weaker than what would be expected from the price direction. It also allows filtering based on price action to take into account whether we have also seen a reversal in the direction of price at the bar’s close.
This indicator provides a strong signal of the possibility of a reversal in price direction.
Delta Divergence conditions are also indicated as part of the Delta Snapshot indicator.
Delta Divergence may be licensed for Sierra Chart on a Lifetime, 1-month or 3-month basis, or as part of the complete Emoji Trading Order Flow Suite. Licences include all indicator updates and enhancements during the license period.