Instrument : E-mini Nasdaq futures
Date : 2021-01-06 09:00
I would like to share with you a M5 timeframe analysis from E-mini Nasdaq futures I did at London open. hopefully it will show you how I work with the cumulative volume delta to find some high probability trades.
Then I will show you how I traded the last signal on a lower timeframe (a range bar 30 chart actually).
In the M5 chart below, you can see that using the divergence between what the price and the “cumulative volume delta” are doing, we had some interesting signals this morning since the price made a lower low 3 times with the cumulative volume delta rising in the same time. It provided some buying signals around 5h00, 6h00, and 9h45 to take some short moves.
On the opposite, around 7h50, the price tried to make a higher high when the cumulative volume delta couldn’t do it on its side. This was a short signal for a potential longer position to hold because we were in a global down trend this morning.
Now let’s see how I traded the latest buying signal around 10h00 to buy the Nasdaq.
I use the range bar charts on a daily basis to scalp instead of a standard timeframe (it’s more a personal preference because I can see clear price moves), this time it’s a range bar 30 chart indeed.
As we found out on the M5 chart, we can see some buyers in the cumulative volume delta and we have a nice divergence when the price tries to make a lower low below the 12500 (most probably for a stops run but this will be for another article).
Then we can see that price quickly goes back above the 12500, although we can see some sellers (but weaker and weaker) in the cumulative volume delta, price continues to rise. This is where I entered a long position around 12520. And when I saw only some buyers coming in along the way, I added a position around 12550.
I was targeting the 12600 but I was monitoring the 12580 level because, if you look at the M5 chart again, it was a nice support level earlier this morning (around 6h) that could have turned into resistance. And I closed my positions around 12580 finally because I couldn’t see any more buyers coming in the voulme delta to push the price. And the price was starting to fall (again here it’s a divergence that I marked on the range bar 30 chart below).
This was an example to show you how I scalp. If it’s useful to you, I will post more and more examples.