The reasoning behind this situation could be as follows: The positive delta may be the result of many aggressive buys (Buy Market) that have been blocked with passive sells (Sell Limit) and have not allowed the price to rise. All these crossing orders appear in the ASK. Subsequently, if there is little demand in the BID (few Buy Limits), a few aggressive sales would cause the price to move downwards. And this is one way in which a positive delta with a bearish candle would eventually be observed. As you have probably concluded, delta divergences implicitly identify a takeover so if they appear in the right place they usually anticipate interesting turns. This does not mean by any means that all divergences will establish turns since sometimes these will occur over an area of little interest and without that intention of takeover behind, hence the problem of its use arbitrarily. 4.5.3

PRICE AND VOLUME TRADER In the end, our task as traders is to identify when imbalances between supply and demand occur and these will eventually show up on the price and volume chart. A trader who only takes into account the price and volume action may enter the market with some delay and may not have certain information available (the real interaction between the participants) but his trading will be much calmer as he will not have to interpret those order crosses. In the previous example of price divergence, the trader who simply analyzes the price action and volume will only focus on the fact that an anomaly has occurred in that action, a divergence effort result. That large number of executed orders will most likely be accompanied by an increase in volume and a narrow range already denoting some divergence. In addition, a subsequent downward turn would confirm this anomaly.

Beyond assessing whether there has been a jump of stops, profit taking, entry of short positions or that buyers have been trapped, which as we have already mentioned is probably a bit of all of the above, what is relevant is the final action and the trader who does not observe the flow of orders but knows how to interpret the chart will eventually reach the same conclusion, albeit with less stress. 4.5.4

CONCLUSION In addition to everything discussed with respect to order matching, it is the precise moment to also recall the different types of agents that operate in the market and the intention behind their actions (hedging, speculation and arbitrage). The orders executed by these participants are also displayed on the BID and ASK, and as we have seen, not all of them have directional intentions which are ultimately those seeking price movement. This is no small matter as the only ones who will show up again to defend their position in case they have aggressively entered the market seeking a profit from the price move will be the speculative traders. We may see the execution of a large order at a price level and it may come from an institution with the objective of covering a position held in another parallel market, or it may be the activation of an arbitrage strategy, to name a few possibilities.