Section 26: Using Delta (TP Placement)

Utilizing Delta for Effective Take Profit (TP) Placement

Delta serves as a vital tool for day traders in numerous ways, including its ability to assist in identifying profit targets. Let's delve into an example of how Delta can be a powerful aid in determining the optimal Take Profit (TP) levels. Setting TP is equally crucial as making the initial entry when it comes to day trading. Every element of a trade, including entry, stop loss, and take profit, must be meticulously positioned to maximize profits while minimizing risks and potential losses.

A significant percentage of traders often struggle with determining where to place their take profits once they've identified a promising entry point. This is where Delta comes to your aid. As Delta is readily available on your screen, the professionals at dRisk have already undertaken the rigorous task of pinpointing levels of noteworthy buy or sell sensitivity.This comprehensive analysis includes factors like Total Volume, Net Volume Evaluation, TPO Charts, Auction Market Theory, and COT reports, extensively covered in Section 23: Introduction to Delta.

For instance, let's assume you've identified a promising upward (LONG) entry point making contact with Delta, as depicted in the image below. Like many traders, you may find it challenging to pinpoint your Take Profit (TP) level. In such a scenario, Delta serves as a reliable tool to determine your TP. Delta's primary purpose is to identify zones of substantial sensitivity where buyers and sellers interact. This comprehensive analysis includes factors like Total Volume, Net Volume Evaluation, TPO Charts, Auction Market Theory, and COT reports, extensively covered in Section 23: Introduction to Delta.

In the depicted image below, it becomes evident that when a trader faces uncertainty regarding their Take Profit (TP), a prudent strategy is to exit the trade before the next Delta level is reached. In this specific instance, we opted to position our TP at the point of contact with Delta to ensure a complete exit from the trade. Failing to place the TP at Delta would expose us to substantial risk, considering our awareness that significant selling pressure enters the market upon Delta contact. As observed in the image below, the decision to place the TP at Delta proves to be a sound choice.

In the image below, the outcome is clearly evident: sellers entered the market precisely at the Delta point as expected. Armed with this foresight, we were able to execute a precise Take Profit strategy, closing our trade in profit before sellers retraced the price to its original entry point.

Delta is one of only four tools we provide at dRisk. Its ability to execute precise take profit strategies is just one of the reasons it earned its spot.