Delta Flow Profile [LuxAlgo]

13 ago

The Delta Flow Profile is a charting tool that tracks and visualizes money flow and the difference between buying and selling pressure accumulated within multiple price ranges over a specified period. It reveals the relationship between an asset's price and traders' willingness to buy or sell, helping traders identify significant price levels and analyze market activity.

The Normalized Profile displays the percentage of money flow at each price level relative to the maximum money flow level, enabling traders to easily compare levels and understand the relative importance of each price point in the context of overall trading activity.

🔶 USAGE



The Delta Flow Profile is made of two principal components with different usability, each one of them described in the sub-sections below.

🔹 Money Flow Profile

The Money Flow Profile illustrates the total buying and selling activity at different price ranges. By analyzing this profile, users can identify key price zones with substantial buying or selling pressure. These zones can often act as potential support or resistance.



The rows of the Money Flow Profile represent the trading activity at specific price ranges over a given period.



A normalized profile is included to compare each zone relative to the peak money flow using a percentage, with 100% indicating that a price range is the one with the highest accumulated money flow.



🔹 Delta Profile



The Delta Profile assesses the dominant sentiment (buying or selling) from volume delta at different price levels to gauge market sentiment and potential reversals.

Delta Profile rows with more significant buying or selling volume indicate dominance from one side of the market in that specific price area. Price coming back to that area might indicate willingness from a dominant side to further accumulate orders within it, potentially causing price to follow the direction established by this dominant side afterward.

The volume delta is determined from the user-selected Polarity Method, with "Bar Polarity" using candle sentiment to determine if a bar associated volume is buying or selling volume, and "Bar Buying/Selling Pressure" making use of the high/low price to obtain more precise results.

🔹 Level of Significance



Users can quickly highlight the price levels with the highest recorded money flow activity through the included "Level of Significance". Various display methods are included:

• Developing: Show the price level with the highest recorded money flow activity spanning over the indicator calculation interval.
  
• Level: Show the price level with the highest recorded money flow activity.
  
• Row: Show the price zone with the highest recorded money flow activity.
  

These levels/zones can be used as potential support/resistance points and can serve as a reference of where prices might go next for market participants to accumulate orders.

🔶 SETTINGS

The script offers a range of customizable settings to tailor the analysis to your trading needs.

🔹 Calculation Settings

• Money Flow Profile: Toggles the visibility of the Money Flow Profile.
  
• Normalized: Toggles the visibility of the Normalized Profile.
  
• Sentiment Profile: Toggles the visibility of the Sentiment Profile.
  
• Polarity Method: Choose between Bar Polarity or Bar Buying/Selling Pressure to calculate the Sentiment Profile.
  
• Level of Significance: Toggles the visibility of the level of significance line/zone.
  
• Lookback Length / Fixed Range: Sets the lookback length.
  
• Number of Rows: Specify how many rows each profile histogram will have.
  

🔹 Display Settings

• Profile Width %: Alters the width of the rows in the histogram, relative to the profile length.
  
• Profile Horizontal Offset: Enables moving the profile on the horizontal axis.
  
• Profile Text: Toggles the visibility of profile texts, and alters the size of the text. Setting to Auto will keep the text within the box limits.
  
• Currency: Extends the profile text with the traded currency.
  
• Profile Price Levels: Toggles the visibility of the profile price levels.
  

🔶 RELATED SCRIPTS

• Money-Flow-Profile
• Volume-Profile-with-Node-Detection