Could You have Taken these Trades?

This is the second of today's posts. More on the theme of delta divergence.

Below are the charts showing two DD trades - "Outside In" trades. I have included both the candle version and the Volume Footprint version as I have had a number of questions about it.

 

 

The two trades are the same but different. The same in that each have a new swing low with a green VB. So prices made a new swing low but the bar ended up with a positive delta.

Looking at context, the first trade was at the Keltner and near a Profile low that took out the IB by just one tick. CCI momentum was turning. Price was a lower low. This was a very hard trade to take. I have taken the smoothing off the CVD for these screenshots to show the raw data. Under the usual inside out setups, the entry for this trade was 13 bars later and 3.50 points higher.

The second trade looks similar. But the context is different. We are far from the Keltner and miles from any Profile support. I entered this trade 10 bars later as the context just didn't fit.

What additional information did I get from the volume footprint that a candle chart did not show? Probably just enough to get me into the trade. The bar that made the new low developed with the open less than the close so was a green candle. Buying at the offer came in as the range bar developed upwards with more volume in the top half of the bar than the bottom. Also, my exit stop would have been wayyyyyyyy outside the Keltner when it was not very steep downwards.

Hard to quantify all this as "rules". It's a picture I look at (Kiki did NOT take the trade) and process the information. It's a very hard trade to get right. What is important and where shall I place the emphasis? Without a higher low the risk is much greater. These outside in trades are tougher as I said.