This is THE KINGS indicator. It includes King 1,2, 3 and 3Kings. They are measuring order flow at three levels and then we combine all three into one, the 3Kings. The bottom of the chart shows Kings 1,2 & 3, while the top of the chart shows them combined into the 3Kings. This gives a much smoother indication of order flow. But, what is order flow? It is critical to knowing what is going on inside the trades. Are the owners, i.e., the sellers, getting their price? Are the non-owners, i.e., the buyers getting their price? If the owners are getting their price… well typically the offer is being lifted and price is rising, and that’s true about 80% of the time, but not always, and there’s the rub.

Suppose the owners want $100 for their instrument and there are 100 of them. The buyers are offering $90 but there are 500 of them. The owners give in to the buyers and hit the bid at $90. The buyers absorb all the sellers (owners) at $90. Delta is negative 100. There are no more owners offering at $100. They have been absorbed.

The next level of owners are offering at $110 and there are 100 of them. The buyers move their bid up to $100 but they do not go to the $110 offer. The owners give in and move down to the $100 bid. All 100 of them are absorbed at $100. The price has now moved up $10 but DELTA has moved to 200 negative. This happens three more times and price is now $140 but delta is a negative 500. It is important to see this happening graphically on a chart. This is order flow. Is the transaction happening on the buy side or sell side and is it moving with or against price?