Very interesting DonPato. I'm familiar with market/volume profile but what is the difference with delta volume profile and market/volume profile? Coincidentally, I am currently implementing volume profile and volumes on FX charts and found the results to be gratifying.Originally Posted by ;
How can you use this instrument if I may ask? And could you be happy to share it or it is only in experimental phase?
Cheers.
Delta quantity is the NET quantity at each level. Buyers-Sellers (or Sellers-Buyers). Again these are market buying and selling which is exactly what generate tick quantity. So at every price point (at the close of the day) you can see whether buyers or sellers at which dominant.
I currently use the tool (and I am just starting my observations) to confirm or refute my notions about how order flow functions, especially those phases I said above. Now I have a more objective method of viewing the order flow/volume arrangement I will make more informed decisions about entries/exits, and where (what price level) to operate stops/limits.
With this indicator I am able to find out what price levels (net) buying and selling dominate the order flow. I will then see to see how price responded to these actions. While still discretionary on my part, I can make a more informed decisions as to whether I believe Order flow dominance is increasing or decreasing and which direction the dominant flow is shifting price. The best part is a clear and indisputable indication of absorption, which can let me better pinpoint entrances or exits, and either reduce vulnerability to risk, or maximize profit possible.
The indicator is created specifically for cTrader and I do not have exclusive rights to it at all. It is available for sale : http://www.algodeveloper.com I asked the owner if he coded for MT4 and that he replied that he did NOT. I also asked him if he'd code something for easy language which is exactly what Tradestation utilizes. He explained he was investigating the matter and would react when he had the opportunity.
Hi Don,
Where does the data come from for the Input Signal to the indicator? FX Broker? Futures Broker?
Due
in this examination period I'm using the information feed from pepperstone's demo server. I will them most likely attempt to use my information feed
Hello all. . .In advancement of our collective knowledge base. I am currently looking at ranges. . .since which appears to be what the market is supplying of late. So while many do not like to exchange ranges (myself included) I discover that using delta volume profile assists in identifying whether the range is steady, and which facet of the order flow (buyers or sellers) appear to be dominant in the range. Additional the order flow that is now visible via this tool makes it possible for us to see WHERE (what price) the buyers or sellers are transacting.
The largest issue with ranges is because they appear to withstand any forecasting and actually feel more like gambling than anything else in the market. The assumption is two fold. If prices will stay stable and just range, then trading becomes an issue of buying the bottom of the range and selling the very best. However, how can we know if it will move from top to bottom (or vise versa) AFTER we input? Imagine if the price breaks the range just after I input? Which side of this range should I participate? Does it matter?
I present this case study on USD/CAD which has been ranging now for fourteen days, on the daily time period, and 6 weeks on larger time frames. With that period of time, an individual could say this range (for the moment) is steady. What exactly does this look like on a chart?
Typical range right? The top appears held by service at 1.3400 (major number) and the bottom around 1.3290-80. For all those of you intraday traders, this really is a fantasy come true. . .100 pip spread with this range with two weeks of opportunity and who knows just how much more?
So which side are the most valuable? Should I exchange from the top down? Or the bottom up? Where is the order flow within this range?
NOW we could see clearly!! It is possible to see that the sellers have obviously dominated the top of the range and are keeping it restricted. What is also apparent is that (compared to sellers) buyers are not as enthused about buying, but if they're prepared to buy, they are not keen to do so until price is at the reduced 1/3 of the range.
Further, any price that breaks out of the currently stable range, is quickly consumed by the opposing order flow. There is no really but curiosity about selling below the range, and also, not very many (if any) buyers on top.
My interpretation (being a complete rookie at this kind of charting) are this:It appears sellers are thicker than buyers (at current price) and this dynamic will probably keep price from moving far greater - assuming this will not change Buyers are weak at best and are just ready to participate at the lower portion of the range, and also these buyers may well be profit takers from smaller shorts covering. Stops are probably building up on both sides of the range and it is a crap shoot which will stop initially. I guess BOTH sides will stop until price continues. . .ie clear the board. If I had to chose which to trade intraday, I would decided to sell the very best and take profit close to the reduced 1/3. Again. . .only my view, but I would be greatly interested in YOUR opinion about this interpretation.
Ok. I shall make a stab at it.
The large boys (International Banks, MM's etc.) are buying as represented by the selling activity from the retailers (Us). If that is accurate then at some point the big boys will begin pumping up the price to begin selling what they've been buying. While this happens is anybody's guess, but at least you may know the price direction.
Out of the chart exactly what stands out to me is that the two fake outs south. The first is on average vol, an average upward bar which closes it's high. This would signify to me retail have marketed the breakout south and the pro traders have purchased them. The second fake BO pub is a bit more volatile but much like character so understanding the expert's are long I'd anticipate price to go higher from here and BO north of the immediate range and test the next level.
Now's trading has proven you right. This market did split higher and very hefty buying. I suspect all of the shorts ceased out and sent prices higher. Of interest to me will be if/where price comes back to retest the tops of this range.
More observations...
Hi, sorry to be pedantic but I'm currently making observations about the usage of delta profile at the tick volume atmosphere. I hope that I can translate this into futures trading too. . .but I'm yet to find someone who can (can ) code the essential indicator. However I'm finding this fascinating to say the least. As usual, I'm trying to locate particular patterns the volume/order flow profile that indicate swing points. I appears to me that I may have discovered something worth exploring.
Again, as is so recognizable in the trading environment, any pattern that emerges is usually relative to the timeframe and also the market. There's not any rigid set of principles that I can come up with that will work over time, nevertheless market circumstances and participant response to those conditions do allow you to assess what those participants are most likely to do.
I suggest the next normal participant response:Many participants (if given a choice) would like to enter/exit the market right as a reversal occurs. Case in point: If you go buy (go long) exactly at or in a few pips of a swing low and also exit right at or in a few pips of a swing high. . .why would not you? Wait for affirmation? This could be true of all traders such as the wise money... If the larger participants are what move on the market AND if it is their order flow that creates swing points (by entering and exiting) would that appear in the order flow? Of course it'd!! So if we look at the delta volume profile for each DAY, we should be able to see their orders being transacted and where (what price) they are transacting...
Consequently, on a significant move higher, we should see large blocks of SELLING just before or just after the swing point has shaped. . .in fact this selling (profit taking) may actually be what generates the swing .
Instance:
you may see clearly here in which opposing order flow, in each case against the current move underway, causes the price to slow or even stop its progress.
The second thing to look for is an inversion at the order flow. . .in other words a normal order flow must look like that:
Majority of selling in the very best, majority of buying in the base. . .this is normal. And to the extent of which side (buyers or sellers) is prominent that the peak in the histogram will occur higher or lower. BUT: if you see the majority of buying near the TOP of an up move or the majority of selling near the BOTTOM of a down movement, you may be taking a look at a swing point. Again notice the inversion in the tops and bottoms of those moves...
Of course they NEVER occur in precisely the exact same order. And it may be that at times, the order flow inversion generates the profit taking, or so the profit taking generates the order flow inverstion. . .however, these two things mixed appear to be consistent.
More observations and testing ahead, but I believe that learning to recognize these modifications in the order flow/volume profile could greatly increase accuracy and reduce exposure to risk on entries. . .in addition, seeing and understanding the order flow/volume profile will undoubtedly increase the efficiency and accuracy of exits, creating better risk-to-reward ratios. What could be better than that. . .lose less on reductions and gain more about wins...
Now the thing will be to try to recognize this instantly and take action on the hard right edge.
Is there a market profile indicator for MT4 which has green and red colored bars like in the above mentioned post, rather than all only gray bars or all numbers?
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