what does positive delta mean before news event ?
A positive delta formation on a 15-minute chart indicates that there is more aggressive buying than selling within that time frame, reflecting a rise in net buying volume or interest. Delta measures the difference between buying and selling volume, so a positive delta means buyers are stepping in more than sellers at that point.
After a long fall in prices, a positive delta can suggest that buyers are beginning to absorb the selling pressure, possibly signaling an exhaustion of the downtrend or a potential reversal. This could be an early sign that demand is building up, and a recovery or temporary retracement might follow.
Here’s how to interpret it in more detail:
1. Initial Bottom Formation: After a prolonged price decline, a positive delta can indicate that buyers see value at these lower levels and are entering aggressively, absorbing the remaining sell orders.
2. Volume and Price Action Confirmation: Check if the positive delta aligns with a price action signal, like a hammer or bullish engulfing candlestick, on the 15-minute chart. Combining delta with these patterns strengthens the signal for a reversal or a retracement.
3. Trend Reversal Potential: If positive delta continues to form across multiple candles and starts creating higher lows in price, it could confirm the beginning of an uptrend. This is especially significant after a major sell-off where demand may now be outweighing supply.
4. Risk Management: A positive delta alone doesn’t confirm a full reversal; it may simply represent short-term buyers. Consider waiting for price to break above key resistance or moving average levels on higher timeframes before taking a long position if you aim to follow a more secure trend reversal.
After a long fall in prices, a positive delta can suggest that buyers are beginning to absorb the selling pressure, possibly signaling an exhaustion of the downtrend or a potential reversal. This could be an early sign that demand is building up, and a recovery or temporary retracement might follow.
Here’s how to interpret it in more detail:
1. Initial Bottom Formation: After a prolonged price decline, a positive delta can indicate that buyers see value at these lower levels and are entering aggressively, absorbing the remaining sell orders.
2. Volume and Price Action Confirmation: Check if the positive delta aligns with a price action signal, like a hammer or bullish engulfing candlestick, on the 15-minute chart. Combining delta with these patterns strengthens the signal for a reversal or a retracement.
3. Trend Reversal Potential: If positive delta continues to form across multiple candles and starts creating higher lows in price, it could confirm the beginning of an uptrend. This is especially significant after a major sell-off where demand may now be outweighing supply.
4. Risk Management: A positive delta alone doesn’t confirm a full reversal; it may simply represent short-term buyers. Consider waiting for price to break above key resistance or moving average levels on higher timeframes before taking a long position if you aim to follow a more secure trend reversal.
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