Chart of the Week

Posted in User Tips by tharnett on January 14, 2011

Here is another simple but useful chart showing a candle chart with a volume breakdown indicator set to display the cumulative delta for each day. The blue lines represent the maximum and minimum cumulative delta values achieved for each day and have each been added as additional volume breakdown indicators. So in essence there are 3 VB indicators applied to the lower pane. Below are the preference windows for each VB indicator.

Benefit
It provides a visual reference to know when order flow is confirming the underlying price at previous highs and lows. It can also help judge whether higher prices are being supported by order flow to the buy side or sell side and if buyers/sellers are taking advantage of “advantageous” prices.

The chart definition can be downloaded here.