5(b). Using Delta to Find Entries

Using Delta to Find Entries

Utilizing Delta to Pinpoint High-Probability Entry Points

Delta's primary function is to illuminate zones of pronounced market sensitivity, where buyers and sellers engage in fierce battles. Identifying these areas of sensitivity with precision provides traders with a substantial advantage in navigating the market.

The following examples demonstrate how harnessing Delta can be a potent strategy for optimal entry, particularly in market consolidation scenarios. As depicted in the accompanying image, when Delta is employed, the indicator will seamlessly integrate these identified sensitivity levels onto your trading interface.

These levels of sensitivity reveal their true potency, especially when the market is consolidating. They empower us to make more informed decisions when seeking entry points, ultimately enhancing our trading outcomes.

Delta-Driven Consolidation Strategy

At dRisk, our team employs a straightforward yet effective strategy: we utilize limit orders for swift, in-and-out entries. These are trades where our objective is not to stay in the market for an extended period but rather to secure high-probability, rapid entry and exit points.

Analyzing the image above, it becomes evident that strategically placing limit orders at area of sensitivity pinpointed by Delta (Delta Zone) could have resulted in several profitable entries amidst the market consolidation.

Allow me to illustrate this concept with a specific trade example. In the image below, Delta has automatically marked area sensitivity on the users chart. We observe that historical price action consistently acknowledges this zone with sell pressure entering the market at every contact Delta. , both on the upward and downward movements. Recognizing the low likelihood of buy pressure prevailing over sell pressure, we strategically place a sell limit order to capitalize on what presents itself as a high-probability entry point.

As seen in the image below, our use of Delta allowed us to pinpoint a high-probability downside entry. In this case, we accurately located a zone of sell pressure, indicating that buyers faced significant resistance in breaking through the Delta Zone upward. Given the historical sell pressure, we can confidently execute a sell limit order (SLO).

Delta serves as a robust tool in the toolkit of traders, irrespective of their chosen strategy. The ability to identify sensitive zones is fundamental for making informed entry and target decisions. At dRisk, our role is to elucidate how we harness Delta and provide real-world examples of its efficacy. However, it's important to note that the implementation of Delta is a user-driven process, allowing traders to customize the indicator to best align with their unique needs and preferences.