This article on Footprint Charts is the opinion of Optimus Futures.

Understanding what drives price changes in the market is essential for traders. Traditional charts, such as candlestick and line charts, display price fluctuations.

However, they fall short in providing insights into the specific transactions at each price level. This is where footprint charts come in handy.

Footprint charts, also known as cluster charts, provide a deeper look into the buying and selling activity within a specific timeframe.

They show the volume of trades at each price level, giving traders more insights into market behavior.

In this guide, we’ll explain what footprint charts are, how to read them, and how you can use them to improve your trading strategies.

We’ll also discuss different types of footprint charts and offer practical tips to help you get started.

Key Points:

• Footprint or ‘Cluster’ Charts analyze transactional volume inside a given timeframe.
• This analysis looks at the interaction between buyers and sellers to uncover opportunities.
• Footprint charts come in several flavors including bid/ask, volume profile, and delta.
• Strategies for trading with footprint charts include stacked imbalances, unfinished auctions, and high-volume nodes.
• Traders can open a free account for 30 days and immediately access Optimus Flow’s numerous footprint charts and analysis tools along with unlimited simulated trades.

What Moves Price Up and Down?

That simple question underpins footprint charts. Most traders and investors are familiar with candlestick and line charts.

These visual representations show us price movement over time and may include volume. But they fall short when trying to tell the entire story, like a book missing its adjectives. That’s where footprint charts come in.

What Are Footprint Charts?

A footprint chart is a multi-dimensional type of candlestick chart that shows traders the volume traded at a precise price level with that candlestick.

Think of it as a candlestick with notes that describe how the transactions occurred within that bar.

The footprint chart was initially created by the now-defunct company MarketDelta as a trademarked product in 2003.

Due to the trademark, different trading platforms have adopted alternate names for footprint charts. Some synonymous terms for footprint charts include cluster charts, bid/ask profiles, and numbered bars.

How to Read Footprint Charts

Before we jump into trading strategies utilizing footprint charts, let’s discuss how to read a footprint chart.

Take a moment to examine the side-by-side image below of a traditional candlestick chart (left) vs. a bid/ask cluster chart (right).

Image 1. Footprint Chart vs. Candlestick Chart Comparison: A side-by-side comparison of a traditional candlestick chart and a bid/ask cluster chart.

Footprint Charts vs Candlestick

On the left side of the cluster chart are the sellers who were hitting the bid (sold). Meanwhile, the numbers on the right-hand side of the cluster chart show the buyers who lifted the order (bought).

To use the 749 x 864 cluster as an example, at that corresponding price there were 749 lots to hit the bid (sold) and 864 lots that lifted the offer (bought).

Cluster charts allow investors to examine the executed orders within a candlestick chart and analyze the interaction between buyers and sellers.

Footprint Charts vs Candlesticks vs Depth of Market

As previously discussed, a footprint chart is a multidimensional type of candlestick chart which shows trading volume at precise price points over a given period. A standard candlestick displays the open, high, low, and closing price without the intrabar transaction information.

Depth of Market (DOM):

DOM is a measurement of the supply and demand for a liquid, tradeable asset. Also known as the order book, DOM shows you how many open orders and relevant quantities exist at each price.

In the screenshot below from Optimus Flow, you can see the different amounts open for the bid and ask across different price points in the E-Micro S&P 500 Futures.

Image 3. Depth of Market (DOM) Example: Screenshot from Optimus Flow showing bid and ask quantities across different price points.

Best Footprint Charts

The three most common types of footprint charts are bid/ask, volume, and delta.

1. Bid/Ask Footprint: This is the most common type of footprint chart. The Bid/Ask Footprint displays the number of contracts traded on the bid and ask price for a given period.
2. Volume Profile: The volume footprint shows the total number of contracts traded at each price without regard for if the trade was a bid or ask. This can be valuable for showing price levels where there is interest from both buyers and sellers.
3. Delta Footprint: While using delta within order flow trading can be complex, the concept of the delta is straightforward. At its core, delta represents the difference between completed orders at the bid and offer for a particular price.

Using the image below as an example:

Image 4. Delta Footprint Example: An example of a delta footprint chart showing volume differences at various price points.

• The first delta is 826. This means that 1,514 buyers lifted the offer against 688 sellers hitting the bid.
• Next, we have a delta of -436. This means that 1,956 buyers lifted the offer against 2,392 sellers who hit the bid.
• Following that is a delta of -75, meaning that 2,402 buyers lifted the offer against 2,477 sellers who hit the bid.

Knowing the volume differences initiated by buyers and sellers at differing price points can help a trader determine which party is being more aggressive. This information might in turn confirm a trader’s suspicions about an emerging price trend.

Note: Volume at the bid indicates sellers. Volume at the ask indicates buyers.

How to Analyze Order Flow Using Footprint Charts

Footprint charts expand on the volume and transactions within a timeframe to create context. Our analysis should seek to understand this additional information.

Key Analysis Points:

Imbalances: Lopsided amounts of buying or selling

Order blocks: Large amounts of contractual volume occurring

High volume nodes: Areas where heavy amounts of volume collect

Each of these identifies an area of support/resistance or a point that precedes an expansion in price.

For example, when we can assume that a spot where heavy amounts of buyers stepped in would also find buyers, all things are equal.

Why?

Because those same buyers could have sold into higher prices and now want to reload back at that same spot.

Similarly, you might find a block of sell orders coming through one candle after another. That could be a clue to future price movement.

The key with any analysis is using context, or looking at the bigger picture, to frame the trade.

Pro Tip: If you overlay a footprint chart on a bar or candlestick chart, ensure the aggregation time frames align. Put simply, if you analyze 30-minute candlesticks, the footprint analysis should also work off 30-minute blocks.

ALSO READ | Best Order Flow Indicators to Spot Buying and Selling Pressure

Footprint Trading Strategies

If you’re new to footprint trading, don’t worry.

We want to give you some trading ideas to help you get started.

Stacked Imbalances

With bid/ask profiles, we see how many contracts trade at the bid and ask.

When we see a lopsided amount stacked vertically in a price range, it can indicate a support or resistance level.

For example, in the chart below, we highlighted an area where several sets of buy orders outweighed sell orders. The Delta footprint chart gives us the clearest picture here.

Image 5. Stacked Imbalances Footprint Strategy: Highlighted areas of buy orders outweighing sell orders in a delta footprint chart.

Traders can use these imbalances to look for reversals or slow the momentum of a strong price movement.

Learn More about How to Identify Imbalance in the Markets with Order Flow Trading

Unfinished Auctions

Unfinished auctions are a unique trade idea specific to footprint trading.

The idea is that each price sees an auction between buyers and sellers within a candlestick/bar.

When a certain price, usually an extreme on the candlestick wick, sees buyers or sellers only, it’s seen as an unfinished auction.

For example, in the chart below, you’ll see areas highlighted where we find zero bids or asks at highs and lows.

Image 6. Unfinished Auctions Footprint Strategy: Highlighted areas with zero bids or asks at highs and lows in a footprint chart.

Volume Profile

So far, we’ve discussed different ways to analyze the intrabar volume. Our last strategy looks for areas of high volume as points of support and resistance.

High volume areas can act as support, resistance, and even attraction nodes to the current price.

In the chart below we noted the price with the highest volume for that given period. Later on, you can see how price found resistance and support, albeit temporarily, at those levels.

A trader could use those prices for a scalp trade in the opposite direction or a swing trade towards those areas of liquidity.

Image 7. Volume Profile Footprint Strategy: Chart showing high volume areas acting as support and resistance points.

How To Start Trading Futures With Footprint Charts

If you’ve never tried them before, you should at least take a test-drive of footprint charts.

Optimus Futures lets you sign up for a free account for 30 days and take unlimited simulated trades.

Here’s a quick step-by-step guide to trading futures using Optimus Futures flagship platform Optimus Flow.

1. Open up a TPO chart – At the top left of the Optimus Flow platform, you’ll find several icons tied to the different tools. Select the light blue ‘TPO’ icon. This will open a cluster chart.

   

2. Analyze your data – You’ve now opened a fully customizable footprint chart.
3. Set up your trade – The easiest way to trade directly from your chart is to enable order chart trading. You can also open the order entry menu. Both are available in the top right corner. You can also select the ‘OE’ icon shown above to open an order entry window.

   

4. Place your order – Once you’re ready, place your order. Be sure to log your trade with any notes in Optimus Flow’s automated trade log
5. Follow your trade – After you enter your position, use the ‘Positions’ window to monitor your trade (The POS icon).

Open Your Free Account

Footprint charts open up a whole new way to look at the market.

Open your free account today with Optimus Futures and get immediate access to our flagship platform, Optimus Flow.

For 30 days, you can explore every indicator, analytical style, and footprint chart Optimus Flow has to offer, along with a host of other functions and indicators.

Plus, you get unlimited simulated trades and access to the automated trade journal.

Trading futures and options involve a substantial risk of loss and are not suitable for all investors. Past performance is not necessarily indicative of future results.

This article on Volume Profile Trading is the opinion of Optimus Futures.

Key Points:

• Volume profiles are powerful analytics that display where the most and least volume occurs in a given period, identifying a value range as well as a point of control where the highest volume occurs.
• While market profiles look at the time spent at each price, volume profiles look at the number of contracts or shares traded.
• Traders use these profiles to identify areas of support and resistance, as well as spots unlikely to contain either.
• Common volume profile shapes include P-shape, D-shape, b-shape, and B-shape.

Traders analyze this relationship to develop strategies and ideas about the market.

This has led to several indicators including volume-weighted average price (VWAP), moving averages, and the like.

Volume profiles take these two concepts deeper, letting traders see how much or little action takes place at different prices.

We had previously discussed volume analysis in the context of footprint charts.

Today, we want to add another layer by digging into volume profiles, explaining what they are, how to read them, interpreting different shapes, and offering up a few strategies to get you started.

What Is A Volume Profile

Volume Profile displays trading activity over a specific period at certain price levels. Displayed as a horizontal histogram (see sample below), it shows significant price levels based on trading volume.

Due to its orientation, the Volume Profile can also be referred to as Horizontal Volume.

Understanding the price action in the context of volume adds another level of analysis that helps traders make better decisions.

Volume profiles help traders identify key points within a given time period that can act as support and resistance.

These include:

• Point of control – A price level where the highest traded volume occurred, often represented with a yellow line.

• Profile low – The lowest price traded during the period

• Profile high – The highest price traded during the period

• Value area – A range within the profile where most of the volume occurred. Typically, traders will use 70% as the benchmark. The range is bordered by the value area high and low.

Is Volume Profile The Same As Market Profile?

Traders will often use the terms volume and market profiles interchangeably. However, there is a key difference between the two.

Market profiles look at how long a price traded at each level, making them time-based.

Volume profiles look at how many contracts or shares are traded at a given level, making them volume-based.

We also want to point out that volume profiles are related to but not the same as footprint charts.

Footprint charts dig into the volume at the bid and ask or similar measures within each period.

On the other hand, volume profiles look at the aggregate trading volume for a time period.

Identifying Support And Resistance Levels With Volume Profile

Volume profiles work well at identifying support and resistance levels as a reactive method. That means they rely on past price movements.

So, if you’re looking to try to find a spot above all-time highs in the market, volume profiles won’t be of much help.

Traders often look for support and resistance areas at two key areas – high and low volume nodes.

High volume nodes, like the point of control, are where heavy amounts of volume were traded. These can imply ‘fair value areas.’ In theory, markets are less likely to break through these areas.

You can identify high volume nodes as peaks in the volume profile as shown below.

Low volume nodes are the opposite. These appear as valleys in the volume profile chart and represent points where less volume was traded. Low volume nodes can imply areas of discount or premium.

When markets approach these areas, they can be more likely to push through than other higher volume points in the volume profile.

Types of Volume Profiles

There are four main types (or shapes) of volume profiles: D, P, b, and B.

Each type corresponds to the distribution curve of the trading volume.

1: D-shaped Volume Profile

Inside a D-shaped profile, the highest level of trading volume occurs centrally. This indicates a balance between buyers and sellers. The price at which volume is greatest is known as the Point of Control (POC).

A D-shaped profile can indicate a market that lacks direction or is choppy. It can also mean a period of consolidation before a breakout as institutional players build a position (known as accumulation).

2: P-shaped Volume Profile

A P-shaped Volume profile occurs when the price rises and then consolidates around a new point of control. The lower thin part of the P-shaped profile shows a period of low trading volume. The wider upper part of the P-shaped profile shows a new ‘fair’ price (POC) between buyers and sellers. This increases trading activity and often indicates a bullish signal.

Typically, we expect to see a P-shaped profile near the highs or after a price run. When it occurs near the highs, that’s often a point where price takes some time to consolidate before continuing with the upward trend.

However, when we find a P-shaped profile near the lows, it can signal a short-covering rally or a reversal that can be used as a bullish catalyst to ride price higher.

3: b-shaped Volume Profile

The b-shaped profile is the opposite of a P-shape. The b-shaped profile represents a period of sell-off before the market settles on a new price. As with the P-shape, the volume of trading activity peaks as price re-balances. As noted, b-shaped profiles show a sell off period indicative of a bearish signal.

Like a P-shape in an uptrend, a b-shape in a downtrend is common and often points to an area of consolidation before price continues with a trend. Conversely, if we see a b-shape during an uptrend, it may indicate a reversal as bulls leave the market.

4: B-shaped Volume Profile

The B-shaped profile occurs when there are two D-shaped profiles inside the specified period. When analyzing B-shaped profiles, traders may separate them into disparate D-shaped profiles.

What makes B-shaped profiles unique is that we find high volume nodes at two different points in the range. This creates bookends for price to bounce between as it consolidates. When we find this after a recent trend, this can signal a pause before the trend continues. That’s why we want to take note of which node provides stronger support or resistance.

Volume Profile Trading Strategies

Bullish Retracement

Like many breakout trades, bullish retracements build on an existing trend. In this case, we look for a longer-term uptrend.

The premise is fairly simple. We want to use a strong upward thrust followed by a consolidation period.

Next, we look for a break over the range and a retest of the point of control. Also, we can look for a move from the top of the range into the point of control.

The point of control acts as a support level to buy the market for a long swing trade.

The chart below shows how the point of control from the previous day’s trading range acted as support for the next leg higher.

Bearish Retracement

On the flip side of the bullish retracement trade is the bearish alternative.

In the bearish alternative, we’re using the momentum of a strong downward move into a consolidation range as our focal point. We then want to use the point of control as a resistance level catalyst to hop on the next move lower.

Using the heating oil futures chart below, you can see how the previous day’s point of control acted as resistance when price came back into it. We can use that level as a spot to initiative a bearish position.

The Low Volume Fade

As mentioned, Volume profiles tell us which prices see the most and least amount of volume.

One way to take advantage of that is looking for setups where price climbs on low volume into a premium or discount low volume node.

To learn more about this strategy, check out Optimus Futures’ weekly trading ideas on TradingView. This week’s idea looks at spots where price climbs into a low volume node on low volume, setting up a fading opportunity.

Start Trading With Volume Profile

Open your free account today with Optimus Futures and unlock all the features of our flagship platform, Optimus Flow, right out of the gate.

You’ll gain access to a wealth of tools from real-time news feeds to volume and market profile charting at no additional cost. It even comes with an automated trading journal.

Plus, you can take unlimited simulated trades for up to 30 days.

Click here to learn more about Optimus Futures and the Optimus Flow Platform.

Trading futures and options involve substantial risk of loss and are not suitable for all investors. Past performance is not necessarily indicative of future results.