What is Footprint and what is it for?
The use of volumes in the practice of a trader is considered one of the most promising and effective methods of market analysis. Unfortunately, there are very few sensible tools for analyzing the number of transactions concluded. The footprint chart is one of them. What is it, how to build it and where to find it, how to use it in the work of a trader?
Are the volumes tick or real?
The volumes that a trader can see in the MetaTrader trading platform have nothing to do with the real ones and can do little to help the trader in analyzing the market situation. They only show the number of ticks (the number of price movements in any direction) for a certain period of time. To display them there are tick indicators. The candlestick on the chart usually acts as a range.
Actual volumes show the number of transactions at a certain price in the context of sales and purchases separately. With their help, you can analyze the mood of the crowd and roughly understand what large players are betting on.
Footprint - a tool that shows the volume of futures contracts directly on the work schedule of your chosen currency pair. This information can and should be used on the Forex market. In any case, there are no such instruments on the spot market and are not foreseen. What is a good footprint?
Firstly, with its help you can build 25 types of graphs, independently choose the volumes that you need. There is also an improved glass of orders. The footprint chart is available as part of the ATAS trading platform. Unfortunately, it is not in the range of domestic Forex brokers. Nevertheless, you can evaluate all the advantages of the terminal for analyzing volumes for free for two weeks on a demo account, and you can use the information received to trade with a broker.
What does the footprint chart look like?
The footprint looks like a candlestick chart, where each candle is shown in terms of the number of transactions for the purchase and sale of a pair at each price.
Red and green columns are Japanese candles. The columns of numbers next to them indicate the number of completed transactions at the price to which they correspond on the scale on the right. The first digit in the column is responsible for sales, and the next one shows the number of orders to buy a pair. Each column corresponds to a horizontal row of red and green. It shows total volumes. Her color indicates who is currently dominating the market. The darker the color of the line, the more volumes are concentrated at this price level.
The body of the candle along with the data on purchases and sales is circled in a gray rectangle. All numbers that are above or below it are the shadow of the candle. The inverted histogram on the right side of the screen near the price scale is a glass of prices where you can see the total number of orders right on the work schedule.
There are situations when during a trend movement there are either upward or downward candles. It is also possible to determine whether a trend is continuing by volume. To do this, it is worth looking at the lines with the largest volumes and studying their behavior in dynamics. If each time the largest volumes move in one direction (for example, upward with an uptrend), while the candles can be multidirectional, make shadows and generally appear randomly in relation to each other, the trend continues and intensifies.