It has often been said that volume precedes price.

Why is volume more important than price? When institutional traders are moving size in
the market, they try to hide their size (volume) and not price. When you see price trade
you form an opinion of the market but when you see the volume, you see the facts of
the market.

What most traders fail to see is that there is more to volume than meets the eye.
Volume is made up of buyers and sellers. Yes, for every buyer there is a seller. But not
every buyer and seller is trading for the same reason. There are long term traders, there
are swing traders, there are short term traders and there are scalpers.
What if you could measure the true strength of the buyers and sellers in the market and
make profitable trades based of that information? Orderflows Delta Scalper does just
that.

But rather than just measuring the strength of the buyers and sellers, what I want to do
is highlight the areas where the buyers overwhelm the sellers or where the sellers
overwhelm the buyers.
Who would you rather be?

I would rather be the guy speeding alongside in the same direction of the ocean liner
rather than the guy in the row- boat about the get run over by the freighter. It’s the
same way in the markets.
Before I explain how it works let me explain first about Delta.
Delta is calculated by taking the volume traded on the offer side minus the volume
traded on the bid side. If Delta is positive there are more aggressive buyers, traders who
are buying the offer price. If Delta is negative, there are more aggressive sellers, traders
who are selling at the bid price. Delta measures the strength of the market’s auction
process.

For a trade to occur in the market there has to be a buyer and seller. At every traded
price, there will be a buyer and a seller. When price moves higher people will often say
there are more buyers than sellers. That is impossible. Price moves higher when buyers
become aggressive and think the current price is cheap. Think about it. Wouldn’t you
rather buy something now for $25 when you know later you can sell it for $30?
When prices start to move, the reason it moves is because of a series of aggressive
buying or selling which will show up in the Delta of a bar.
The most important component of Delta is volume. Volume must be understood in
context of the market. When the volume is expanding positively or negatively, a trader
must watch its strength to fully comprehend the shift in supply and demand.
The BIG difference between this new version of Delta Scalper and the previous version
is that the new version takes into account price action. The original version was
focused predominately on delta with only general price action. The new version takes
into account more recent price action.
Delta Scalper allows you to see the positive or negative expansion between buyers and
sellers so that you can make predictable and exploitable positions in the market.

What drives price movements in the market? Difference of opinion. When a market is
trading as per normal, at equilibrium so to speak, the delta should be relatively low or
not changing much. Supply and demand at that point is about equal. The problem is no
one knows where this level of equilibrium is, it constantly changes. Delta Scalper
measures the difference of opinion and, more importantly, how it is changing.
I created the Orderflows Delta Scalper to show me when the buyers overwhelm sellers
or sellers overwhelm buyers. It may not be just one big buyer or seller. It can be a few
big buyers or sellers coming into the market at the same time. Unfortunately, you don’t
know their intentions, there could be numerous reasons they are all piling into the
market at once. What is important is their activity.
There are five scenarios when it comes to Delta in a bar:

1. Extremely positive Delta number – indicates aggressive buyers have dominated the
bar. Buyers are buying all the available supply offered by sellers moving the market
higher.
2. Average positive Delta number – indicates aggressive buyers outnumber aggressive
sellers, but not overwhelmingly. This can be a sign of accumulation when a series of
average positive Delta bars is put together.
3. Small positive or negative Delta number close to zero – indicates aggressive buyers
and aggressive sellers are pretty much evenly matched. Price is at an equilibrium
where both buyers and sellers are happy to trade at.
4. Average negative Delta number – indicates aggressive sellers outnumber aggressive
buyers, but not overwhelmingly. This can be a sign of steady reduction of positions or
shorts building up.
5. Extremely negative Delta number – indicates aggressive sellers have dominated the
bar. Sellers are hitting every bid as they dump their excess supply in expectation of
lower prices.
What Delta Scalper does is look at the relationships between the different Delta
numbers as they come in and analyse them. Delta Scalper then generates buy or sell
signals in real time as the occur allowing you to get in at the earliest possible time.
The ratio of buyers to sellers is what determines the market direction at any given time.
Many traders struggle to grasp the importance of Delta analysis. They have difficulty
understanding that there is a “strong hand” in the market because after all there for
every buyer there is a seller. What Delta Scalper does is alert you who are in control of
the market.

Delta Scalper alerts you to areas in the market where buyers are drying up and sellers
are getting stronger (up moves) and also where sellers are getting less and buyers are
starting to dominate (down moves).
When Negative Delta increases as prices rise, what are the longs doing? They are taking
profits, selling out their long positions. What are the shorts doing? They are covering,
buying back and taking their losses.

When Negative Delta increases as price fall it is a sign of liquidation and aggressive
selling.

When Positive Delta increases as price increases, buyers are taking control of the market
from the sellers. This is an aggressive action.
When Positive Delta increases as price decline it is a sign of a bottom forming. Longs are
starting to accumulate a position.
The Orderflows Delta Scalper was designed to run on any type of chart – candlestick
chart, bar chart or Orderflows Trader chart.

When there is a buy signal there will be a blue up triangle and a blue zone drawn out on
the chart.

When there is a sell signal there will be a red down triangle and a red zone drawn out on
the chart.

I set my zones to 5 bars because if the market doesn’t react the way it is supposed to
rather quickly then I am no longer interested in the signal after a certain time period.
The length of the zone can be adjusted by you if you want to make it longer or shorter.

You can disable the zones for an even cleaner looking chart.
DeltaScalper on a footprint chart with the zones drawn.
DeltaScalper on a bar chart with zones drawn.
DeltaScalper on bar chart without zones drawn, just the trade signal.
How Does One Trade Delta Scalper Signals?
In the original Delta Scalper user guide, I explained 2 ways to enter the market when the
Orderflows Delta Scalper gives a signal.

1.Aggressive – Get in ASAP and look for the market to pop. Use a market order. Trade
Entry Signal disabled. Showing all potential trade entries.

2. Mild – Get in on a pull-back just above the zone or within the zone. Use a limit order.
Trade Entry Signal disabled.
Showing all potential trade entries.

3. With Trade Entry Signal enabled, take all trades at the market as soon as a signal
appears. Once a signal appears with the Trade Entry Signal enabled then it is already
confirmed, and the market is moving in the direction of the trade.
My preferred way to enter the market when using Trade Entry Signal enabled because it
gives me the best profit potential as the market is moving in the direction of the trade
signal. More on the Trade Entry Signal later on in this guide.

With the Aggressive entry, you need deeper pockets because there will be times you
take a lot of heat on a trade as it can go against you as soon as you get in. Of course,
there will also be times when you will get in early on some monster moves. With the
Aggressive entry, you are getting in no matter what.

With the Mild entry, you can get into more trades than the Low-Risk entry but less than
the Aggressive entry as you will need a pull-back to happen in order to get into the
market.
With the above said it depends on the market I am trading. Most markets I use the Trade
Entry Signal to filter out trading opportunities. But some markets I look at all signals, for
example, Ultra Bonds.

There are times when you should be using an Aggressive entry and times when you
should consider using a Low- Risk entry. With fast moving markets where moves can
start in the blink of an eye, I prefer the Aggressive entry.
So where do you place your stop? You place your stop on the other side of the zone. It
will depend on the market what levels you want to use as well as the type of entry you
are using. Not necessarily right at the edge of a zone, give it a tick or two or three
depending on the volatility of your market.

Where do you take profit? That is where reading the order flow comes in. If you don’t
read order flow and just want a hard target, you can use a 3:1 or more reward to risk
ratio. It depends on you and the market you are trading. There are some markets where
I turn off Trade Entry Signal because I want to take more trades for quick hits.
Enabling Tick Replay
Delta Scalper requires you to enable Tick Replay in NinjaTrader 8. By enabling tick replay
you will be able to see where the Delta Scalper found trading opportunities on the
historical chart.

If you do not enable tick replay, then the Delta Scalper will not appear on your historical
charts. Setting up tick replay is easy.
Tick Replay – make sure the box next to Tick Replay has a check mark.
Tick Replay Enabled Tick Replay NOT Enabled
Tick Replay – If you don’t have the choice to enable/disable tick replay when you open a
new chart then you will need to set up “Show Tick Replay” in the settings from the
NinjaTrader control panel. Read the following page on how to set it up correctly.

No choice to enable/disable Tick Replay.

Tick Replay – Go to the NinjaTrader control panel and click on Tools
Tick Replay – From the Tools menu, choose Options.
Tick Replay – Go to Market Data and then Show Tick Replay and click on the box so a
check mark appears.

Click here

2
Tick Replay – Once you do that, then when you go to open a chart, you will then have
the Tick Replay box which you can then check.

Click the box to the right of Tick Tick Replay now enabled.
Replay to enable Tick Replay.
Delta Scalper
Settings
Let’s look at the settings:
License token – this is where you
need to enter your license token
for Delta Scalper. Your license
token is sent to along with the
software download instructions
and this user guide. Just copy and
paste it here. If you do not enter
your license token the Delta
Scalper won’t work and you will get
a pop-up saying Delta Scalper is not
licensed.
Let’s look at the settings:
Trade Entry Signal – Default is
enabled.
When enabled, signals that have
follow through order flow will be
shown with the blue up triangle for
buys and red down triangle for
sells. Will not repaint.
When disabled, anytime conditions
are met, a signal will print. As a bar
is forming a signal may repaint if
conditions change. But once a bar
closed will not repaint.
Let’s look at the settings:
The Misc settings are the main
settings you will be interested in.
Look Back Bars – default 7 – This
setting tells Delta Scalper how
many bars to look for a swing high
or low.

To disable, set to 0. If you want to

see all signals, set to 0.
Recommended settings: 0, 1, 3, 7, 9
but really depends on your trading
style.
Let’s look at the settings:
Negative Delta Strength – default set to 1. A
setting of 1 is when sellers overwhelm the
buyers. You can adjust the strength up for
extremely stronger signals, but 1 is the level
where the Delta strength is very strong.
Positive Delta Strength – default set to 1. A
setting of 1 is when buyers overwhelm the
sellers. You can adjust the strength up for
extremely stronger signals, but 1 is the level
where the Delta strength is very strong.
Each level up is 2x stronger than the previous
level.
Max level is 5.
Let’s look at the settings:
Signal Box Height In Ticks – How thick you
want to zone box to be drawn. This is relative
because if you want to buy in the zone or on
the other side of zones it will determine how
thick your zone is. Default is set to 2, but you
can use 3, 4 or 5. It depends on you.
Signal Box Opacity – How strong the opacity of
the zone drawn on the chart. Default is 25. The
higher the number the opaquer the Signal Box
will be drawn.
Let’s look at the settings:
Signal Box Width In Bars – How many bars out
you want the zone drawn. I set it to 5 because I
feel the market should pull back into the
relatively soon, ie 5 bars. If it doesn’t happen
soon I don’t want to take the trade. I find 5 is a
good number for me. You may prefer a slightly
longer duration of 7 bars or shorter duration,
like 3 bars.
To disable, set to 0. No zones will be drawn.
This will give you a clearer chart.
Signal mark displacement in ticks – default set
to 2. How far above or below the bar to draw
the signal.
Let’s look at the settings:
Signal Only On Higher High Or Lower Low –
Default set to Enabled. When enabled, the
signal will occur around a higher high or lower
low. If disabled, will signal whenever
conditions met. It is an extra filter. If you
disabled Look Back Bars, then this setting
doesn’t matter. If you use low number of look
back bars, like 1 or 2, this setting comes into
play.
Let’s look at the settings:
Signal Box Height In Ticks – How thick you
want to zone box to be drawn. This is relative
because if you want to buy in the zone or on
the other side of zones it will determine how
thick your zone is. Default is set to 2, but you
can use 3, 4 or 5. It depends on you.
Let’s look at the settings:
Do Not Adjust These Settings
Data Series – The contract and
chart type being analyzed.
Setup – How the contract is being
analyzed.
Visual – How Delta Scalper plots on
your chart.
Let’s look at the settings:
Plots – how the Delta Scalper plots
the buys and sells on the chart.
Positive Delta Change for buys.
Negative Delta Change for sells.
You can change the colors and
shapes (plot style) if you have
other indicators which plot the
same color and shapes.
Trade Entry Signal
Trade Entry Signal – This setting can be enabled or disabled. If you just want to
see every time the conditions are met for a signal to be generated, then you
would simply disable the Trade Entry Signal.

However, when trading with order flow, it is always better to take a trade in the
direction of the market and the Trade Entry Signal allows you to do that.

Trade Entry Signal – default is enabled.

The Trade Entry Signal is something I use in my trading. I use it to help me

determine to take a trade or pass on the trade. It keeps me out of bad trades, the
trades where there is no follow through order flow in the direction of the trade. If
there is no follow through order flow, the probability the trade will work out is
decreased and has a higher chance of failing.
The Trade Entry Signal, when enabled, will signal after the signal bar when the
subsequent bars exhibit complimentary order flow in the direction of the trade
signal.

You can choose to use the Trade Entry Signal or not use it by unchecking the
box next to the word Enable. Note – The zone will still draw if you choose, but
there will be no signal drawn. Up arrow or down arrow.
When enabled, a BUY Signal (Blue Triangle Up) will print only after the signal bar
closed and the next bar(2) start moving in the direction of the signal. The signal
will print on the bar that has the confirming price action after the signal bar. A
SELL Signal (Red Triangle Down) will print only after the signal bar closed and
the next bar(2) start moving in the direction of the signal. The signal will print on
the bar that has the confirming price action after the signal bar.
Trade Entry Signal – When disabled, a BUY Signal (Blue Triangle Up) will print
on the bar as soon as the conditions are met. A SELL Signal (Red Triangle
Down) will print on the bar as soon as the conditions are met.

Note: As the bar is forming and the order flow is coming in a signal may appear
and disappear based on the order flow. But once the bar is closed and there is a
signal, it will not disappear or repaint.

Trade Entry Signal – When enabled, a signal will print on your chart in the bar(s)
immediately AFTER the signal bar, not directly on the signal bar.

What this means is when the conditions of the Delta Scalper are met, for a trade
signal to be generated, the order flow in the next bar(s) needs to be in the
direction of the trade signal.
You can decide how many ticks you want the market to start moving in the
direction of the trade for a trade signal to be generated. I use 2 and the default is
set to 2. In slower moving markets, you can adjust it to 1 if you like.

You can decide in how many bars you want the market to start moving in the
direction of a trade for a trade signal to be generated. I use 2 and the default is 2.
This means the market must move at least 2 ticks in the direction of the trade
within the next 2 bars for a signal to be valid.
Trade Entry Signal ON Trade Entry Signal OFF

To disable the Trade Entry Signal just

uncheck the box that reads “Enable.”
Trade Entry Signal is OFF. Delta Scalper showing all signals.
All signals have the Blue Up Triangles for buys and Red Down
Triangles for sells. In the circles there are 3 buy signals that
failed because there was no follow through order flow. Those
are the trades you don’t want to take.
Trade Entry Signal is ON. Delta Scalper showing all signals.
Tradeable signals have the Blue Up Triangle for buys and the
Red Down Triangle for sells. Trade Entry Signal does not
signal you to buy those signals.
Trade Entry Signal OFF.
Showing signals every time conditions are met.
There were trades that would have stopped you out several times.
Trade Entry Signal ON.
Showing signals only where there is follow through order flow to
confirm the signal.
3 confirmed signals.
7 unconfirmed signals.
XX

X X Stay out of
X bad trades!
X X
Trade Entry Signal ON. Stay out of
X bad trades!
X
X

X
X
Preferred Settings
The default settings are a terrific starting point for most traders when first looking
at the Delta Scalper. However, depending on your trading style you will probably
want to adjust the settings more towards your trading style and risk management.

The main setting is Negative Delta Strength and Positive Delta Strength.
A setting of 1 is the minimum. It cannot be 0. The strongest is 5.
DeltaScalper – Default settings
This setting is normal as Negative Delta
Strength is set to 1 and Positive Delta
Strength is also set to 1.

In this case, the Look Back Bars is set to 7

to look for potential trades in recent swing
highs or lows.

Trade Entry Signal is enabled, so it will filter

out trades that do not exhibit follow through
order flow.

Starting point for most markets. Adjust based on your own trading style and risk
management.
DeltaScalper – Stronger setting
This setting is stronger as Negative Delta
Strength is set to 2 and Positive Delta
Strength is also set to 2.

In this case, the Look Back Bars is disabled

(set to 0) so it will show potential trades in
any bar the conditions are met. You can
adjust to Look Back Bars to a higher
number to find reversals.

Trade Entry Signal is enabled, so it will filter

out trades that do not exhibit follow through
order flow.
Most markets: ES, 6E, CL.
DeltaScalper – Stronger setting – But Look Back Bars Set To 3
This setting is stronger as Negative Delta
Strength is set to 2 and Positive Delta
Strength is also set to 2.

In this case, the Look Back Bars is set to 3.

Delta Scalper looks for recent swing highs
and swing lows.

Trade Entry Signal is enabled, so it will filter

out trades that do not exhibit follow through
order flow.

NQ, MNQ, YM, GC

Basically, the three setting you will concentrate on are:

Look Back Bars.

Negative Delta Strength.
Positive Delta Strength.

I am always weary of giving a group of settings for particular markets and chart
types because some traders will think that is what it has to be, when in fact it is
just a guideline and not set in stone. This is especially true when dealing with
different trading risk parameters.
Delta Scalper – Default Settings
Delta Scalper – Strength the same, but Look Back
turned off.
Delta Scalper – Strength set to 2, double the
strength, Look Back still the same, 7.
Delta Scalper – strength set to 2, but no lookback.
The End