Is Market Delta a MUST ???

Discussion in 'Technical Analysis' started by bill321, Apr 14, 2007.

  1. bill321


    I am reading more and more about using market delta to support u r trading decisions,

    If you want u can read here

    and in lot of other bloggers are also pointing to this.

    Will like to invite a discussion and see how others are doing using this tool.

    I am not targeting Scalping and more trying to capture to Big moves on Emini's.

    thanks in advance for u r inputs
  2. Horsesh!t

    The only thing consistent is price. Historical pattern chasing is not consistent.
  3. steenbab


    Hi Bill,

    Thanks for mentioning my blog post. Before I say a few things about Market Delta, let me make clear that I am not affiliated with the firm, don't receive any commercial compensation from them, and my posts have not been solicited by them.

    I first turned to Market Delta shortly after joining a proprietary trading firm in Chicago as their in-house trading coach. My concern at that time--and it has only grown since then--was that the data extracted from the DOM ladder was increasingly unreliable for decision-making among short-term traders. Bids and offers were entered and pulled from the book so frequently that it was difficult for most traders to obtain a true feel for nascent supply and demand.

    Market Delta only tracks volume that actually trades, not orders in the DOM. It parcels transaction volume that occurs at the market bid vs market offer as a way of determining whether sellers or buyers are more aggressive at that moment. A useful feature of the program is that it can be set up with bars of varying lengths, so that you can see shifts in volume distribution over varying time frames.

    I find Market Delta very helpful in trading the S&P eminis. It is not especially helpful in trading instruments that are very highly arbed, such as SPY. I know of professional traders who also find it helpful in the fixed income futures. Stock traders might want to track their favorite issues during a free trial to see if the program provides insight and a potential edge.

    One other thing: a number of traders use Market Delta with Market Profile, the latter providing broader context for trades. This can be very helpful in visualizing breakout trades and failed breakouts that will revert to the value area.

    This post provides a simple illustration of Market Delta; my blog has others, and I'm happy to answer questions. I'd also be interested in hearing from other traders who use MD, to see if their applications are different from my own.

    Thanks again for this excellent forum--

  4. Isn't ES highly arbed?
  5. steenbab


    Hi Bill,

    Of course ES is arbed, but not like, say, the emini currencies or SPY, where the arb trade is a very significant proportion of total volume. It's in those situations that I don't find MD to be helpful.

    For the trader not using MD, tracking the NYSE TICK can be quite useful. The TICK ($TICK) assesses the number of *stocks* trading at offer minus those trading bid, whereas Market Delta is tracking actual volume traded at offer vs bid for particular instruments. The underlying logic, however, is similar, in that you're looking for shifts in demand/supply (as tracked by those indicators) to lead directional market movement.

  6. I've tried it 2 or 3 times now. The software does offer a different view and for that alone it may be worth looking into. I haven't found it useful as more than a decision support tool, and even then I find that it is not useful enough to justify the 125.00 USD per month.

    If I were first starting out and had nothing else or knew next to nothing about the market, I think it would be the way to go, and not use anything else. The reason why I feel this way is that the product looks at the market the way we should all look at the market: buyers vs sellers and volume at various price points. I think this view would allow most to keep treading water until they became educated and moved on.

    I had initial success with the product the third time around, but in retrospect, I think that success had more to do with the market I trade (ZB) falling in a pattern conducive to the MarketDelta software for a week so.
  7. cmaxb


    I think this technology will filter down to other products eventually. CQG offers bid/ask analysis.
  8. I realize that others have methods where MD fits in perfectly but I have tried MD and all the dancing numbers and colors made me dizzy and lost my sense of market momentum so it is not suitable for everyone.

    In addition quite often the price simply blows through levels that are id'd as quality buying and selling by MD, so it comes down to context. If you happen to have a setup of well structured multi time frame set of indicators you can enter the market with good possibility of success without MD because even a sloppy entry will be compensated by being on the right side.


  9. Well said. It got to the point where I had to ignore the number of failures. What you describe as "blows through". After you realize that, then you realize that your making up or rationalizing things when it works.
  10. Do you mean that after a week of good 'feedback' you experienced with MarketDelta on ZB then the consistency of the pattern disappeared?
    #10     Apr 15, 2007