Is Market Delta a MUST ???

Quote from Bernard111:

Do you mean that after a week of good 'feedback' you experienced with MarketDelta on ZB then the consistency of the pattern disappeared?
:confused:
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Yes, and I would say that it is a stretch to say that the pattern lasted a full week.

So that there is no misunderstanding let me make the following points:

It is an excellent product
Customer service is excellent
The philosophy behind it is sound
The view it gives is unique
I would highly recommend using it for 1 - 3 months to really hammer home that the market is all about price, volume and buys versus sells.

After that though, it is time to move on.

A small but regular example of what I saw in the ZB contract would be a slow 5 to 10 tick rise in price over several 5 min bars. Mixed green and red. Delta number mixed positive and negative. At the top of the 10 tick rise, all of a sudden the bid/ask battle would appear to favor the notion that the move up is losing steam. Everything is looking good. Dark red color, bid/ask pointing down, delta number pointing down, the ZB's go down 1 or 2 ticks. Back and forth back and forth, and then boom, price breaks out to the upside.

Let me put it too you this way, if you would like to bet on a sure thing, you can bet that a marketdelta setup will fail consistently in the ZB contract.
 
MarketDelta isn't a must because it's not particularly unique. Most charting programs have an indicator that allows you to see volume traded at the bid and the ask. The only unique thing is being able to see volume at individual prices but unless you're scalping a few ticks here and there this is totally unnecessary. The underlying concepts are sound but it's overpriced compared to say Ensign and Sierra, especially as the standard charts that come bundled with it (Investor/RT) are a buggy mess so you'll need to pay for separate software.
 
Quote from johnpinochet:
Let me put it too you this way, if you would like to bet on a sure thing, you can bet that a marketdelta setup will fail consistently in the ZB contract. [/B]
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IMHO, marketdelta is not a setup at all. Just another way to analyze the data, leaving the setup creation an exercise for the user.

Best regards,
MK
 
It appears to me that all he is doing is organizing the last trade information into a spread sheet. Seems like this is something you could do with excel without too much difficulty.
 
Quote from johnpinochet:



Let me put it too you this way, if you would like to bet on a sure thing, you can bet that a marketdelta setup will fail consistently in the ZB contract.
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:p

Thanks for the feedback -- I'm a fan of your ZB journal.
 
Seems to me that many people are operating on a string of flase asumptions when using Delta.

Most basic is that +ve delta represents 'buying' and -ve delta 'selling'. Last I looked a futures contract needed a buyer and seller on both sides.

Secondly those that realise the above is false still think that aggresive buying (buying on the ask) represents what the 'smart money'/'big boys' are doing. That is often false.

Having said that it does give another perspective when trying to look at order flow and some people here seem to use it succesfuly to help with there trade decisions. Essentialy it can give strong clues as to where market orders are hitting. Whether they are to enter or liquidate is a different matter of course.

Here is an example (I have been meaning to ask for opinions on this and may start another thread on it if there is any interest) :-

The DAX has been going more or less straight up for a couple of weeks. Many days it will go down for the first hour. Often the -ve delta in this hour is pretty large. Price will then move up for the rest of the day.

Lets say price hits -25 on a delta of -2500. It will then rise through 0 to say +25 and still show a negative delta!! Eventualy it may close +50 and the delta for the day will still only be +2500.

These are illustrative numbers but it is happening like this regularly. I am guessing price is being suported on the bid by the 'smart money' when there are no more sellers it is bid up. Actually I would welcome comments on this senario - maybe it deserves its own thread.

Cheers,
Nick.
 
Quote from BlowFish:


Secondly those that realise the above is false still think that aggresive buying (buying on the ask) represents what the 'smart money'/'big boys' are doing. That is often false.
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I think the very first thing that anyone learns via the tutorials is how to see volume at any size you desire. If 100 to 500 lot trades in the ZB/ZN aren't "big boys" I don't know what is. I alternated between all volume and only volume at various levels from 100 to 500 in the ZB/ZN.

I found nothing of value by playing with the volume settings I mention above.
 
What amazes me is that most people think of the progression of the price auction as a linear and orderly process.

If it was that trading would be easy.

It is linear in time but it has other dimensions and this is why MD can be useful as a tool in some conditions and not others.

Take just one aspect: Liquidity.

Again, most people think of liquidity as constant, (I would define liquidity as inventory or negative inventory potentially deployed) that's given while it actually varies with price level, time of day, time zone activity, seasons, holiday schedules, production and marketing cycles, news announcements and in open outcry trading wether or not a pretty girl, celebrity or bagpiper walks on the floor.

MD organizes auction information on what has factually happened in the recent past but it does not offer a clue what is going on behind the scenes or what is about to unfold.
AS OFTEN AS NOT - sometimes due to changing liquidity conditions - a decisive move on the particular time scale happens OUT OF CHARACTER with the more recent past . So as often then not MD is useless. (some of these conditions have been described earlier in the thread)

In addition like with any technical tool the scale of the setting is crucial.

A Ferrari is a great driving tool so how come there were a few notable crashes lately?:) It is misused.

Sometimes the market is so liquid and active that one minute chart (even a 15 second chart) reveals the true character of price movement in perfect technical formations but at other times a 15 minute or hourly chart is looks like noise. So are you changing the settings on MD to account for the change of character?

If you are skilled enough to successfully adjust the scaling on MD or any other tool to be tuned for the pulse of the market then you are a master trader and do not need MD.

So, it comes down to this: MD - since it works very well in certain conditions - should be considered if it also fits ones personal style for one's tool box but it is a mistake to think of it as the holy grail.

While I am writing this I do not forget that all of us are beneficiaries of constant innovations in the industry and it is great to have forums like this for exchanging ideas with fellow traders.


Regards,

GC
 
Quote from johnpinochet:

Everything is looking good. Dark red color, bid/ask pointing down, delta number pointing down, the ZB's go down 1 or 2 ticks. Back and forth back and forth, and then boom, price breaks out to the upside.

[/B]
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then use it as a long signal. what is the issue?
 
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