What is Volume Delta Indicator?

What is Volume Delta Indicator?
TabTrader Team
TabTrader Team
Reading time is 3 min
Reading time is Nov 23, 2022

Volume Delta is a way of measuring buy or sell pressure for an asset at a specific price — a key aspect of successful crypto trading. TabTrader’s Volume Delta indicator gives users access to ready-made trading analysis for any cryptocurrency pair. 

What is Delta in trading?

Delta has several distinct applications when it comes to financial asset trading, including cryptocurrencies.

The main and most complex form of Delta applies to derivatives, and specifically options trading. One of the so-called “Greeks”, Delta measures the relationship between an option’s price and the price of the underlying asset.

Volume Delta

The type of Delta used on TabTrader refers to trade volume on an exchange pair.

Put simply, volume Delta is an expression of the difference between buy pressure and sell pressure. The data is calculated candle by candle, and thus varies depending on the timeframe chosen.

Volume Delta fluctuates around zero. If a pair has zero Delta, it implies that buy and sell pressure is exactly equal. A positive Delta reading means more buy pressure than sell pressure in the given candle, while a negative Delta implies the opposite.

Sounds simple, but there are nuances to the TabTrader Volume Delta indicator.

The further away the Delta value is from zero, the stronger buyers’ (for positive Delta values) or sellers’ (for negative Delta values) intent is.

The distance from zero thus tells traders to what extent a buyer or seller is willing to carry out a trade at the market price within a set timeframe.

TabTrader App contains an additional iteration of Volume Delta which is overlaid on top of the standard volume bars. Note that in this setup, both positive and negative Delta is plotted upwards — on the standard Volume Delta indicator, negative Delta extends downwards below the zero mark.

image1.png Source: TabTrader Volume Delta indicator for BTC/USDT on Binance.

Cumulative Delta

The above information is key for those planning to analyze Delta values across larger timeframes.

This is made simpler by so-called Cumulative Delta, which stacks regular Delta on top of itself over a given period.

Using this, traders can compare Delta forces at work at specific price points — for example, they can see how strong intent is at a swing low or swing high far apart from each other. 

The TabTrader app’s Measure of Delta with Ruler

The ruler feature includes the option to measure combined Delta over a specific timeframe (depending on chart type). The feature is currently available on iOS.

image3.png Source: TabTrader App, ruler instrument with delta

What is Volume Delta used for?

All in all, volume Delta is a useful tool for understanding market sentiment dynamics before entering a trade at a specific price point.

While market psychology, particularly in cryptocurrency, is notoriously fickle, volume Delta cuts through the noise to offer simple insights into what buyers and sellers are doing and how confidently they are doing it.

How do I access Volume Delta info on TabTrader?

The TabTrader Volume Delta indicator is already live on TabTrader for iOS, Android and TabTrader Web. Download it now and try it out for yourself.

If you already have the app, you can find the Volume Delta indicator in the Indicators menu. It will appear as a separate chart below the asset pair price chart.

image2.png Source: TabTrader App. Selecting the Volume Delta indicator in TabTrader.

Volume Delta FAQ

What is Delta?

Delta can refer to various phenomena in financial asset trading, mainly in derivatives options. It describes the changing relationship between two prices or sets of values.

What is volume Delta?

Volume Delta measures the relationship between buy and sell pressure for an asset such as cryptocurrency.

What is cumulative Delta?

Cumulative Delta helps compare market behavior at two price points less closely related to one another if looking at the price chart alone. It offers insights into the strength of support or resistance at given price points.

How can I use Delta in TabTrader?

Start using the TabTrader app and choose the Volume Delta indicator from the Indicators list.

Looking to get started in crypto trading?

Try TabTrader on mobile or web!

google-playapp-storeweb-app