Delta Power Zones

Overview
Delta Power Zones is an advanced order flow analysis indicator that identifies high-probability support and resistance levels based on buying and selling pressure intensity. By analyzing the relationship between volume and price action, this indicator reveals where institutional players are actively participating in the market.

🔹 What is Delta?
Delta represents the difference between buying volume and selling volume. When delta is strongly positive, buyers are in control. When strongly negative, sellers dominate. This indicator tracks extreme delta readings to identify zones where significant order flow occurred, creating potential future support and resistance levels.

🔹 Key Features
1. Extreme Delta Detection

Identifies bars with unusually high buying pressure (DB - Delta Buy)
Identifies bars with unusually high selling pressure (DS - Delta Sell)
These extreme readings often mark the start of strong moves or reversal points

2. Power Zones (Dynamic S/R)

Buy Zones (Green): Areas where extreme buying occurred - acts as potential support
Sell Zones (Red): Areas where extreme selling occurred - acts as potential resistance
Zones automatically adjust based on configurable width percentage

3. Absorption Detection

Buy Absorbed: Strong buying pressure but price closes lower - sellers absorbing buyers (potential resistance)
Sell Absorbed: Strong selling pressure but price closes higher - buyers absorbing sellers (potential support)
Absorption often precedes reversals as it shows one side failing despite heavy volume

4. Delta Strength Bar Coloring

Bars colored based on delta intensity relative to average
Bright green = Strong buying | Dark green = Moderate buying
Bright red = Strong selling | Dark red = Moderate selling
Gray = Neutral/balanced flow

5. Real-Time Info Table

Current Delta value
Delta Strength (multiple of average)
Average Delta
Buy Volume percentage
Current signal status


🔹 How It Works
Since TradingView doesn't provide native order flow data, this indicator intelligently estimates buy/sell volume using:

Candle body direction: Bullish closes suggest more buying, bearish closes suggest more selling
Candle body size: Larger bodies relative to range indicate stronger conviction
Wick analysis: Long lower wicks show buying absorption, long upper wicks show selling absorption
Volume distribution: Total volume is allocated between buyers and sellers based on price action characteristics

This approximation method has been validated against actual order flow data and provides reliable signals for most liquid instruments.

🔹 Signal Guide
SignalMarkerMeaningDBGreen Triangle UpExtreme buying - potential support formingDSRed Triangle DownExtreme selling - potential resistance formingABS (Orange)X Cross AboveBuying absorbed by sellers - watch for reversal downABS (Blue)X Cross BelowSelling absorbed by buyers - watch for reversal up

🔹 How to Use
For Support/Resistance:

Green zones act as potential support - look for long entries when price revisits
Red zones act as potential resistance - look for short entries when price revisits
Absorption levels provide additional confluence

For Trend Confirmation:

Consistent DB signals confirm uptrend strength
Consistent DS signals confirm downtrend strength
Absorption signals warn of potential trend exhaustion

For Reversals:

DS signal at support zone = potential failed breakdown
DB signal at resistance zone = potential failed breakout
Absorption at extremes often precedes reversals


⚙️ Settings
SettingDescriptionDefaultExtreme Delta MultiplierHow many times above average delta to trigger signal2.0Zone WidthWidth of power zones as % of price0.2%Lookback BarsPeriod for zone detection50Delta Smoothing PeriodEMA period for average delta calculation14Session FilterLimit signals to specific trading hoursOff

🎯 Best Used On

Indices: Nifty, Bank Nifty, S&P 500, Nasdaq
Forex: Major pairs with good volume data
Crypto: BTC, ETH, and other liquid coins
Stocks: Liquid large-cap stocks
Timeframes: 5m, 15m, 1H, 4H (works on all, but intraday recommended)


💡 Pro Tips

Confluence is Key: Combine power zones with other S/R methods (FVG, Order Blocks, Pivot Points)
Volume Matters: Signals are more reliable on high-volume instruments
Context is Everything: A DB signal in a downtrend may just be a pullback, not a reversal
Absorption Precedes Reversals: Pay extra attention when you see absorption at key levels
Adjust Multiplier: Increase for fewer but stronger signals, decrease for more sensitivity


⚠️ Disclaimer
This indicator estimates order flow using price and volume analysis. While the methodology is sound, it is an approximation and not actual tick-by-tick order flow data. Use in conjunction with other analysis methods and proper risk management. Past performance does not guarantee future results. This is not financial advice.