Explaining the Meaning of "Delta"

Explaining the Meaning of "Delta"

This week we wanted to continue showing the valuable relationship between PRICE and DELTA. Everyone knows what price is, but delta is a new term for many aspiring traders. Here's the definition and a video to explain.

Aggressive Buys - Aggressive Sells = Delta

One of the easiest ways to understand delta is to realize that volume is what fuels the market. Without volume price would not be validated. When a trade occurs at a price level a specific amount of volume is attributed. Price discovery is achieved by volume pushing price back and forth to find equilibrium and delta gives a way to see how good of job it is doing.

Delta measures the directional force of volume and provides a quantifiable measure to volume's impact on price.

So what we encourage traders to do is identify the direction of delta, note recent highs and lows of it, and use it as proxy for where price may be going.

If you want to experience the software take a trial of MarketDelta Charts.

See and learn this in realtime in the MarketDelta Trading Room!

Trade Example Using Intermarket Relationships and Footprint

Trade Example Using Intermarket Relationships and Footprint

Tips for Using Cumulative Delta to Confirm Price

Tips for Using Cumulative Delta to Confirm Price