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Orderflowsdeltatradingcourse Lesson5deltawrapup

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11 views

Orderflowsdeltatradingcourse Lesson5deltawrapup

Uploaded by

dy45
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Orderflows Delta

Trading Course
Lesson 5 – Delta Exercises & Wrap Up
Disclaimer
This presentation is for educational and informational purposes only and should not be
considered a solicitation to buy or sell a futures contract or make any other type of investment
decision. Futures trading contains substantial risk and is not for every investor. An investor could
potentially lose all or more than the initial investment. Risk capital is money that can be lost
without jeopardizing ones financial security or life style. Only risk capital should be used for
trading and only those with sufficient risk capital should consider trading. Past performance is
not necessarily indicative of future results.

CFTC Rules 4.41 - Hypothetical or Simulated performance results have certain limitations,
unlike an actual performance record, simulated results do not represent actual trading. Also,
since the trades have not been executed, the results may have under-or-over compensated for
the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs
in general are also subject to the fact that they are designed with the benefit of hindsight. No
representation is being made that any account will or is likely to achieve profit or losses similar
to those shown.
By now you should understand how to use delta in your
trading plan.

Generally I am always looking at delta confirming a


move with delta and price going in the same direction.

But there are other situations I also look for:


Delta moving but price not moving.
Price moving but delta not moving.
Delta and price are diverging.
Delta helps to paint an overall picture of what is
happening in the market.

Delta also helps to show you areas where things are


happening that you just wouldn’t notice through any
other form of analysis. For example, iceberg orders.
When delta is moving or growing, in either direction,
but price isn’t moving yet, it is telling me there is
absorption occurring and I would be looking to trade in
the direction of price once it starts moving.

For example, delta is getting more and more negative


but price isn’t moving down that is a sign that there are
bidders absorbing all the aggressive selling and I would
look for prices to go up.
When price is moving but delta isn’t strong in that
direction then it tells me that aggressive participation in
that move is weakening and I would be looking for signs
to trade in the opposite direction.

For example, I would look for strong opposite delta


numbers over the next few bar.
Delta and price are diverging in a bar indicates to me
that within a bar there was a change of supply and
demand and I would look to trade in the direction of
price.
Lets do a quick exercise. I will show you a chart and give
you look at the delta and think about what you see and
how you would trade it. Then I will explain what I see on
the chart and you compare your thoughts against mine.

I suggest you make notes on the chart.


Exercise #1
Exercise #2
Exercise #3
Exercise #4
Exercise #5
Exercise #6
Exercise #7
Exercise #8
Exercise #9
Exercise #10
Exercise #11
Exercise #12
Exercise #13
Exercise #14
Exercise #15
Exercise #16
Exercise #17
Exercise #18
Exercise #19
Exercise #20
Exercise #21
By now you should be able to see what is developing in
the delta to have seen some of the same things I
explained in charts I just went over. If not, I suggest
going back and writing down what I just went over that I
saw on the charts so you can start to think about what
is happening in the market so you can start to see it too.
Please remember that delta does not necessarily show
something of use to a trader is every single bar, but
there are times when delta exhibits something that is so
clear that you will be amazed at how foretelling it was.
This concludes the Orderflows Delta Trading Course.

Thank you and happy trading!

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