The value of Volume Delta
In professional day trading, we use a couple to a few top tools that help us confirm where good trade potentials can be. Using the right tools can help avoid a lot of avoidable trades, that can add up in not only commissions, and potential losses, but also an emotional cost.
In today’s example, we use volume profile split by sessions, ETH and RTH (extended and regular), on a thirty-minute chart for our key levels, and we are also looking at Volume Delta, which is an AMAZING NinjaTrader indicator found at ninZa.co. This great indicator will give you an edge on your trading, without having to spend a ton of money.
We did see the Globex ETH Session was in a tight range. Granted this week is numerous announcements due on interest rates and this Friday is Quadruple Witching, which means contract expirations across the broad markets, options, futures, and etf’s.
We saw price at the US Session break out to test new highs, failed, and then came back in the range from the overnight. We found using the Volume Delta indicator in addition to our footprint charts for entry that this was a great short.
When we also reached this support of about 3954.25 later this morning, we found bullish sentiment which was also confirmed in volume delta. This long was another great trade for another 10 plus handles on the ES E Mini S&P500 Futures Contract.
But when the price this time came back down to support it was time to look deeper inside the candle. We do this using footprints. And, one of the KEY ingredients in order flow or footprints is volume delta. What is volume delta? Volume delta at a bar is the difference between the total buy volume & the total sell volume of the bar. This is a SUPER IMPORTANT indicator used by successful trading professionals, and it can be a great fit for any trading systems.
In the next set of photos, I will show you this trade unfolding.
This trade was 6 points gain off the Emini ES at $50 per point. We see on the last photo when we hit our target level price turns back up and we got a series of aggressive buying back into the range for the complete 24-hour session.
Are we surprised yet? Look how price still continued to move but we got confirmation with the aggressive buying taking place on ninZa.co's Volume Delta indicator.
And every other thirty minutes we saw candle over candle closing much more aggressive. We highly recommend using this with a smaller time frame to execute and manage your orders and risk.