Question:
“Regarding the Cumulative Delta indicator, I have noticed some lines that appear on the chart, but I do not know what they are marking or indicating. If they are marking supply/demand levels or support/resistance levels, then there would be far more of them, so I am wondering what their significance is.
In order to get the lines on a new chart so they would appear without having any other indicators so only the lines would appear, I used a 2 second chart because even a 1-minute chart could take hours.
These lines come from the Cumulative Delta indicator as it is the only one I have on the chart, and I think are the ones labeled “Price Action: Local Top and Price Action: Local Bottom.
These are the only inputs I think could be doing this, so I was wondering what their significance is and how are they to be used. Attached is a chart showing the lines.“
Answer:
Let me explain their meaning clearly:
1. When a BUY signal appears
If later a SELL signal appears, but price moves above (breaks) the high of the previous BUY signal,
then a new BUY signal will appear.
The horizontal line you see is drawn to mark that previous high, so you can easily confirm when price breaks it.
2. When a SELL signal appears
If later a BUY signal appears, but price moves below (breaks) the low of the previous SELL signal,
then a new SELL signal will appear.
The line marks that previous low, helping you see when price breaks it.
Purpose of these lines
They are not supply/demand levels and not support/resistance levels.
They simply act as price-action reference levels that the indicator uses to decide when a new BUY
or SELL signal should be generated after price breaks a previous signal’s structure.
If you’d like, you can send me your screenshot again and I can highlight everything directly on it for you.
And his results:
“Thank you. That explanation makes sense. I understand it now. I do really like both the Quantum Vol-Delta & Cumulative Delta indicators. They are also good at spotting potential turning points as well as showing divergence.
I am still doing simulated trading but last week I did just 8 trades, but all were winners. ”
His Setup & Strategy Overview (Summary)
He focuses on the NY session, aiming for scalp and intraday trades with high-probability setups. His approach blends time-based charts with King Renko charts to confirm signals and filter noise.
1. Chart Setup
He currently uses four charts and is still refining his final layout:
- Time charts:
- 5-minute
- 2-minute
- King Renko charts:
- 12/4
- 15/5
→ He said: “I have found that using the combination of the 5-minute and 2-minute in conjunction with and confirmation for signals on the King Renko charts 12/4 and 15/5 really help me find solid setups.“
2. Core Indicators
He combines system signals with delta-based tools:
- Solar Wave → on time-based charts
- ThunderZilla → on King Renko charts
- Quantum Vol-Delta + Cumulative Delta → on both chart types
- Special focus on Delta reversal bars, which he mentions as a “great entry points allowing for small to reasonable sized stops with fair and easy to reach targets.“
3. Trading Method
- Looks for high-probability setups only
- Prefers scalps with manageable stop losses
- Regularly trades 4 hours per day, 5 days a week
- Target: 5–6 points per day → enough to earn 1%+ daily
4. Risk Management & Position Sizing
He uses a very systematic contract-sizing model:
- 1 contract per $2000 of account balance
- Example:
- $6000 → 3 contracts
- $8000 → 4 contracts
- If equity drops below $6000 → reduce to 2 contracts
Stops:
- Generally 10–15 points
- Sometimes uses strict 1:1 R:R, but prefers a bit more wiggle room to increase win rate
His sharing about a real example – when a late entry turns risky:
“I did 2 trades this morning and both winners, though the 2nd trade was a higher risk but paid off. I got in later then I should have so required more room but paid off. This is the danger though when jumping in late on a missed signal. It increases risk.“
5. Trade Discipline
- Biggest challenge: patience
- Avoids jumping in late – missing the planned entry increases risk
- Emphasis on sticking to rules, waiting for the proper signals and conditions.
6. Performance Snapshot
- First 10 trades: 100% win rate
- Total gain: +12.84% in the first week
- Acknowledges it may be a lucky streak, but overall results show strong potential if you could maintain discipline.