TDU Orderflow Footprint Delta Candles NT8

How to use delta candles to spot the end of the trend

In the following screenshot, we encounter another example. This time, the market is clearly in a downtrend, and a big negative delta candle appears, bigger then all preceding delta candles within this downtrend. Naturally, one might anticipate the price to continue downward. However, it is crucial to observe what unfolds in the subsequent bar.

What happens is that two positive delta candles appear, suggesting a bullish signal. However, it is plausible that this could merely be a minor pullback before the prevailing trend resumes.

But then the 3rd bar shows a small bearish delta candle, one whichis considerably smaller than the big  negative we saw before.

Now if you think of this.. if we expect price to continue to go lower. Would we nog expect sellers to come in and create a larger negative delta candle  ?

Instead we get two positive candles followed by a small negative delta candle. This serves as a clear signal that the market dynamics have shifted, and we can anticipate a pullback or even a reversal in the trend. Subsequently, as anticipated, such a pullback or trend reversal does indeed occur in the subsequent bars.

Bar closing at its min/max delta

A bar closing at its max delta is typically considered a bullish sign. This is because it suggests that there was substantial buying activity during that time period, with the buying volume exceeding the selling volume. This can indicate that buyers are in control and pushing the price upwards, which might result in a continuation of the bullish trend.

Conversely, a bar closing at its min delta suggests a bearish sentiment. It indicates that there was significant selling activity during the time period, with selling volume exceeding buying volume. This might suggest that sellers are in control and driving the price downwards, potentially leading to a continuation of the bearish trend.

All other (normal) bars are shown with  green or red color

Bar Delta Divergence

The indicator will show a small circle above or below  bar when there is delta divergence

Delta divergence happens when there is divergence between price and delta

Bullish delta divergence
– green bar with negative delta

Bearish delta divergence
– red bar with positive delta

Bloodhound / Automated strategies

This indicator exports32 which you can use in Bloodhound*, Ninjascript or your automated strategies:

* Note that Bloodhound does not support tick replay. There fore you cannot use bloodhound in combination with this indicator for any historical trades. Real-time trading will work fine

Please note that the this indicator does NOT include a Footprint chart indicator which you see in some screenshots. The Orderflow Footprint Delta Candles indicator will work on any chart and does not require a footprint indicator