2(c). Delta Entry Strategy for Compass - Intermediate Strategy

Delta Entry Strategy for Compass

Delta Entry Strategy for Compass (Intermediate)

Delta is named after Delta Zones. The Delta Zone is a financial metric derived from the disparity between the volume of buying and selling activities observed at various price levels over the past 10 to 15 years.

Markets exhibit a historical memory, particularly in their selection of equilibrium points and opportunities for acquiring or distributing assets at discounted rates. These points are typically favored by institutional investors for conducting their transactions.

In contrast to individual retail traders, institutions engage in substantial volume trading among themselves. Delta Zones play a pivotal role in maintaining market liquidity. When institutional investors anticipate accumulating assets for an upward price movement, they strategically place a significant volume of orders near the lower boundary of these zones, effectively preventing prices from undergoing substantial declines.

In this strategic game, institutional investors frequently capture and recapture these Delta Zones, manipulating prices in their desired direction. Once a Delta Zone is captured, it becomes a focal point of defense, either within the zone or along its periphery.

What is the method of finding these Delta Zones? To identify these zones we look for;

1. Total volume per price level

2. Net volume per price level

3. TPO charts (time, price, opportunity)

4. COT reports (commitment of traders)

5. Institutional supply, demand for larger accumulation/ distribution

6. Auction market theory

Example 1(a) Compass + Delta Long Entry

Example 1(b) Compass + Delta Long Entry

Example 1(c) Compass + Delta Short Entry

Example 1(d) Compass + Delta Short Entry