Cumulative Delta Indicator
An excellent indicator for buy and sell signals. Perfect trend detector.
Different factors move the Forex market. But in general, it is the demand and supply forces between the buyers and sellers that pushes the prices up and down. When the buyers are more than sellers the price goes up. Similarly, when the number of sellers supersedes buyers, the price plummets. The price momentum is dependent on how aggressive the buyers and sellers. Therefore, you need to have enough data to tabulate the number of sellers and buyers in the market. However, even with this data calculating the difference of buyers and sellers at every stage is time-consuming. Luckily the Cumulative Delta Indicator for MT4 – free download does the job for you.
Essentially, delta is the difference between the buyers and sellers. The indicator calculates the difference between the buyers and sellers and displays the information as a bar in a window below the chart. The bar elongates when there is high momentum in the market.
Interpreting the Cumulative Delta Indicator is easy and straightforward. Therefore, you can use it easily whether you are a rookie or experienced in trade. The indicator works well in all time frames including the daily, 1 hour and 15 minutes and can be used to trade all instruments including forex currency pairs.
How to Use the Indicator to Trade
As mentioned, the Cumulative Delta Indicator shows the sum of delta bars by subtracting the volume of buyers from the sellers. You can alter the number of bars to be included in the summation.
Buy Signal
A buy signal occurs when the indicator posts a green bar. This means the buyers are more than sellers in the market and have the power to push the price high. When the market is in the uptrend, you should look to open a long position.
Similarly, the indicator gives a sell signal when the sellers are more than the buyers. You should therefore consider opening a short position. A massive bearish pressure is characterized by an elongated red bar.
The price chart shows the price movement for Great Britain against the US Dollar. The price is on a strong downward trajectory meaning the sellers are pushing the price downwards. The indicator posts a massive red bar indicating the price is dropping. You should, therefore, enter a short position.
Conclusion
The Cumulative Delta Indicator shows whether the buyers or the sellers are in control of the market. It gets this information by calculating the difference between buyers or sellers. As a trader, this information will help you decide whether to buy or sell. Essentially, you should sell when the market is in a downtrend and buy during a bullish market. It is prudent to use this indicator with other trading strategies and tools to establish confluence and enhance positive results.
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