What are footprint charts?
Footprint charts are a type of candlestick chart that provides additional information, such as trade volume and order flow, in addition to price. It is multidimensional in nature and can provide an investor with more information for analysis, beyond the price of the security. This tool is a unique offering that is gaining popularity among major graphics software providers.
- Footprint charts are a type of candlestick chart that provides additional information, such as trade volume and order flow, in addition to price.
- Footprint charts provide the advantage of analyzing multiple variables in a focused diagram.
- Common footprint charts include footprint profile, supply / demand footprint, delta footprint, and volume footprint.
Understanding footprint charts
Footprint charts provide multi-dimensional diagrams that allow traders to view additional market variables overlaid on a candlestick chart, including information on volume, bid and ask spreads, and liquidity levels. Traders have the ability to customize the footprint charts to include the individual variables they are most interested in tracking. As with standard candlestick charts, traders can also customize the chart’s time frame to analyze short, intermediate, or long-term value movement.
In general, footprint charts provide the advantage of analyzing multiple variables in a focused diagram. These charts can also be grouped with other multivariate charts used by advanced traders, such as level 2 stock charts or depth of market (DOM) charts. Many advanced charting providers offer multivariate quote systems that can be purchased on a subscription basis in addition to standard software services.
MarketDelta is one of the most popular software providers of footprint charts, which are available through monthly subscriptions. The MarketDelta platform connects with many of the leading brokerage firms to enable trade automation. MarketDelta also offers many different customizable data sources for an additional fee.
Footprint graph variations
There are several types of footprint graphics that may be available through a graphics provider. Some of the more common footprint charts used by traders include the following:
- Footprint profile: Shows traders the volume at each price via a vertical histogram, in addition to the regular footprint bars. The footprint profile allows traders to see at what prices the liquidity is being pooled.
- Supply / demand footprint: Add color to volume in real time, for easier viewing of buyers and sellers surveying supply or demand. With this footprint, traders can see whether buyers or sellers are the parties responsible for influencing a price movement.
- Delta footprint: Shows the net difference in each price between the volume initiated by the buyers and the volume initiated by the sellers. The delta footprint helps traders confirm that a price trend has started and will continue.
- Volume footprint: Unlike the volume histogram on traditional charts, the volume footprint segments volume not only by time, but also by price. This chart is intended to help operators determine capitulation points.