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Volume Delta Trailing Stop

By LuxAlgoSep 5, 2023

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The Volume Delta Trailing Stop builds an entry-to-exit workflow from lower-timeframe order flow, a volume-driven branch of the trailing stop family. It hunts for bars whose delta volume disagrees with their direction, painting them blue when a red bar hides rising volume or orange when a green bar hides falling volume, and sets a trigger line at the divergent bar's extreme. Only a break of that trigger opens a position, which a delta-governed trailing stop-line then manages.

How to Trade the Volume Delta Trailing Stop?

  • Blue bar (bullishBear): a red candle with upward lower-timeframe volume. The trigger line forms at its high.
  • Orange bar (bearishBull): a green candle with downward volume. The trigger forms at its low.
  • Trigger break: price through the line opens the position, firing 'signal up' or 'signal down' alerts; the stop-line then tracks lows in bullish trades and highs in bearish ones.
  • TS-line break: the exit signal, alerted as 'TS-line broken down' or 'TS-line broken up'.

Direction can be judged against the open or the previous close, and neutral volume (bars closing where they opened) can optionally count as up-volume. Lower-timeframe calculations may repaint, and a 100,000-intrabar ceiling means higher chart timeframes call for a coarser resolution such as 5 or 10 seconds.

Volume Delta Trailing Stop Settings

  • LTF: the lower timeframe, from 1 second to 1 minute; finer settings approach tick precision.
  • Trigger: whether a close or the high/low must break the trigger line.
  • Adjustment / True Range Multiplier (default: no adjustment): offsets the stop-line by a set percentage of price or by a true-range multiple.
  • Comparison basis: judge price direction against the open or the previous close.
  • Neutral volume as up-volume: how zero-movement volume is classified.

Frequently Asked Questions

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