Breakdown & Walkthrough of using the Skew Templates

52kskew
7 min readDec 3, 2021
alpha.thekingfisher.io

Firstly make sure you have read this thread on navigating the Bazar:

Once you have read that you will have access to where to find my templates:

Skew Premium
Skew Basic
Skew Vanilla
&
BTC Compact

Read Previous write up first to understand CVDs & other metrics explained there:

Skew Basic

Idea was to combine commonly used systems for familiarity as well to keep trend as clear as possible on any timeframe.

Ichimoku
Bollinger bands & Regression MAs
Trend channel
EMAs
VWAPs

BTC EMAs

In this template I bring edge & market flow into trend following moving averages

Lets break this down to core components:

Cumulative Liquidation Delta

The indicator at the top of the basic templates are called CLD (Cumulative Liquidation Delta)

This is important for noting areas of offside positions being forced out of the market.

Great location to take profits & hedge.

Red bars = Long liquidations
Green bars = Short Liquidations

Green Box
The sweep into the lows on spot driven COVD variant “Omicron” long liquidation event, prime area of interest for large market players to fill positions into these liquidations because it’s efficient enough for huge size (8–9 figures)

Red Box
Sweep of short positions in offside liquidity hunt leading to shorts being liquidated, Same strategy; large market players fill their hedges or often sell spot into these rallies creating resistance.

Buy vs Sell volume

This indicator will show you per every candle if there is buying pressure or selling pressure and an increase or decrease to note areas of passive orders.

White box + White arrow = distribution starts
lack of buyers and passive seller absorption

Red arrow = Seller domination picks up quickly (trend change)
Leads to seller climax & capitulation event (long liquidation event)

Price then makes Lower Low, however selling volume in the lower low is not indicating continuation. (absorption)

Green line divergence = Trend change

Green box = Retail shorts get baited into shorting into heavy bids (absorption)

Cumulative Volume Delta (CVDs)

CVDs are useful for identifying trend before structure represents the same indications.

Red arrows = Flat top with Spot supply pressure (Yellow & White line) whereas Perp CVD (Blue line) starts to buy into these sells (absorption) resulting in collapse.

Green arrow = Strong Coinbase spot bid lifting sells persistently. Value migration higher (retest of trend)

In other words great tool to see how market participants react to certain price areas and news events.

Volume Extreme (Filtered Volume)

Volume Extreme highlights large volumetric moves in the market based of a specific period length (example: previous 50 candles)

Green bar = Higher than average buying
Red bar = Higher than average selling
Grey = average volume

Purpose is to take advantage of the liquidity for mean reversion trades or trend shifts/confirmations on any timeframe.

Use with confirmation of other indicators such as:

Spot CVD / Perp CVD
Liquidations
Indicators such as EMAs or Bollinger bands

Examples

Volume trend confirmations with EMAs (1H)
Bullish reversal confirmation with heavy sell + green candle + CVDs migrating higher

Skew Vanilla

Bybit Vanilla

These Templates are more revised for the best signals with confluence of Skew Premium or Skew Basic.

For example:
Basic EMA & Bybit Vanilla

Dual Template Layout

I developed these to be more systematic based & easy to integrate with Order flow systems like exocharts traders/Sierra , Moving Average traders & so forth.

Alike to Skew basic they include:

CVDs
Buy vs Sell indicator
Volume Extreme (Taker Volume)
Calculated Delta (White line)
CLD (Cumulative Liquidation Delta)

Each Template is fitted with a Perp CVD and the reference spot exchange (coinbase):

Bybit + coinbase
FTX perp + coinbase
Binance + Binance spot (since they move together)
Deribit + coinbase
Bitfinex Spot + Bitfinex Perp

Bybit Vanilla

Each Vanilla template plots the according CVDs inline with candlesticks for clean observation of the market & how each perp & spot CVD react to current market price.

Coinbase bids 53K–54K
Coinbase sells 58K

Offside Perp:
Bybit shorts 54K
Bybit chases 58K then gets squeezed on spot selling

Delta

Delta line

Delta line a measurement for divergences against price for:

Mean Reversion divergences
Market defined resistance (in line with spot CVD selling)
Top & bottom divergences

Example of hidden spot CVD & Delta divergences

Coinbase CVD + Delta

Buy vs Sell flow indicator

This indicator often used as confluence with the Delta line for reversion trades and good areas to hedge.

Divergences shown above signify opportunities if supported by CVDs to go long at point of seller climax & Volume supported absorption

Example with CVD, Delta & Buy vs sell Divergences at seller climaxes

Can also be used on HTF to identify distributive patterns and accumulation on drawdowns

Example of 4H divergences

Buy vs sell + Delta Divergences

Red arrow = Distributive

Green = Accumulation

Then combining all indicators knowing that the market tends to moving in the direction of the most favourable liquidity & liquidations

All indicator divergences with price

Confirmation Divergences seen in:

CLD: drying up liquidations (less people to hunt)
Falling volume signals (red or green bars in the direction) — Reversion soon
Delta line confirmations of reversion, strength or weakness in current trend
Signals towards new trend forming

Skew Premium

These templates are where you can easily see how the market is reacting to price action and when OTC or Institutional money exits/enters the market

BTC Market Screener

These are used to see exactly what exchange drives price & who’s offside in the market (over exposed or covering)

Each Exchange CVD
Volume Delta
Premiums vs Spot
Ask vs Bid difference
Liquidations

BTC Perp vs Spot Premiums + Market CVDs

With this template you can identify clean trend & flow. When Perps beginning shorting lows and chasing highs into spot Market Makers

Premium = red (perps trading above spot price)
Discount = green (perps trading lower than spot price)

There’s many other Skew Premium Templates but leaking too much alpha. (Check my Twitter I post them occasionally)

BTC Compact

One of my older creations to combine all portions of the market, more now for users to become familiar with the concepts of tools I use like CVDs & Delta.

As well getting familiar with KF Liquidation maps; which you can add in later with any template.

Free Template to try out

Main Chart with Volume delta
Volume plotted by ratio between buyers and sellers:

red = more net selling momentum
green = more net buying momentum

3 Tape panels:

Spot Tape
Perp Tape
Futures Tape

Used to see who is buying or selling and understanding start of volatility & absorption around psychological prices.

Liquidation and spread panel :
learning how market chases positions out and then reverts against price.
(Green =Short liquidations, Purple = Long liquidations)
Spread the white dotted line indicates spread increase aka imbalance between buys & asks in a move.

When it’s close together volatility probability increases significantly:

Note Tape
Volume Delta on chart
CVDs
&
Candle closes

CVDs Panel:

Spot aggregate CVD
Binance Spot CVD
Binance Futures CVD
Perps aggregate CVD

The cumulative position (CVDs) and trend bias of each market compared with current price.

Who is buying or selling and how this impacts price or if absorption is clear by passive orders. (in reference to tape panels and Liquidations panel)

Basic & Vanilla Templates will be free every weekend to try out

Find these templates at:

alpha.thekingfisher.io

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