How to interpret the cumulative delta

Hi, may I know how the length of each cumulative bar is determined? Some are long some are short. I tried to find the answer online. However, I could not find it.

Thanks!

Cumulative Delta is simply the difference between bids and offers at a given price. Traded Volume is measure in bids and offers - bids indicate people are selling, offers indicate people are buying.

Let’s imagine we’re looking at ES. If we’re looking at Bid-Ask Charts we can imagine this scenario - if there are 3500 bids and 4500 offers at the price 4796.5, the bar at 4796.5 will have a net value of 1000 and point toward the offers side.

If you’re using the Cumulative Delta indicator on a separate plot, it combines that data for each bar and plots it vertically instead of horizontally. It also shows the cumulative value on the price axis. This will tell you the accumulation of bids and offers for the whole trading day. So you can tell if a market is in favor of bids or offers based on the value.

A market in favor of bids will be in the negative values (like today on ES) and a market in favor of offers will be in the positive values. The bars will give you an idea of the immediate changes in the market, while the values on the price axis will give you a better idea of the big picture, since even big upticks in offer volume won’t necessarily mean anything in a market that is in the negatives for its day cumulative value. You can use the Cumulative Delta in these ways to get an idea of what direction the market is headed both long and short term.

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