MCumulativeDelta Indicator

The MCumulativeDelta Indicator shows the buying / selling pressure that is happening in the market. It serves to determine whether supply or demand is dominating and in control.  The use cases for this indicator are vast. The following examples will explain how to use this indicator.

 

Example 1: Gold - 500 Tick Chart
If you see a higher high but the cumulative delta shows less ask volume, chances are its a top or turning point. This is called a divergence. The price and the actual demand contradict each other.

In this example, Gold (500 Ticks). The cumulative delta shows that demand has diminished, in spite of the price moving up. This is a divergence. The next wave shows supply coming in. On the following no demand wave is an excellent point to put in a short position

 

Example 2: CL - 1000 Tick Chart
The Cumulative Delta does a great job at showing which side is in control.

In this example, CL (1000 Ticks). We see that bid volume dries up on the -227, -72, and +10 waves. The cumulative delta then shows that demand is dominating while the price rises. At the ceiling line that finds the top we see that the demand volume in the cumulative delta has decreased substantially, despite making a new high. This is a divergence, as the ask volume does not confirm the rise in price and could be a good time to exit the long position.

 

Example 3: EUR/USD - 5 Minute Chart
In this example, EUR/USD (5 Minute), the Cumulative Delta shows the bids drying up. Not only is this happening but there is also no downward progress. At the 2748 downwave a lot of volume is spent trying to come down, but unable to take out the low established by the 1985 downwave. Next we see demand comes in with volume and delta volume, followed by the last point of supply. The cumulative delta at this point shows that the buyers are in control.

 

Example 4: ES - 1000 Tick Chart
The Cumulative Delta divergence creates spring.

In this example, ES (1000 Ticks), this is another case of seeing the bids drying up and the cumulative delta showing that demand is in control. After the top is found by the ceiling line, the cumulative delta shows very weak bid volume. So there hasn't been a change in the uptrend behavior yet. On the 167 upwave we see a renewal of ask volume in the Cumulative Delta, followed by the 230 downwave which shows effort and no result. Despite the 230 down volume, price is unable to make real progress going down. At this point the cumulative delta shows sizable bid volume, but since price didn't move much down, this becomes a divergence. From this point price springs up and continues to trend upwards.