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How I Use Delta Without Treating It as a Buy or Sell Signal

Sachin Yadav

Positive delta generally means more volume executed at the ask than at the bid during the measured period. Negative delta indicates the opposite.

But positive delta doesn't guarantee that price will rise, and negative delta doesn't guarantee a decline.

I compare delta with actual price movement.

If aggressive buying produces little upward progress, I investigate whether sellers may be absorbing that activity. If selling produces little downside progress, I look for possible absorption on the other side.

Delta becomes more informative when I study its relationship with price.

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