Footprint Charts

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 multi-dimensional in nature, and can provide an investor with more information for analysis, beyond just the security's price. This tool is a unique offering that is gaining popularity among leading charting software providers.

Key Takeaways

  • 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 benefit of analyzing multiple variables in a focused diagram.
  • Common footprint charts include footprint profile, bid/ask footprint, delta footprint, and volume footprint.

Understanding Footprint Charts

Footprint charts provide multidimensional diagrams that let traders observe additional market variables overlaid on a candlestick chart, including information on volume, bid-ask spreads, and liquidity levels. Traders have the ability to customize footprint charts to include the individual variables that they are most interested in tracking. As with standard candlestick charts, traders can also customize the chart’s time-frame to analyze the security’s movement on a short, intermediate, or long-term basis.

Overall, footprint charts provide the benefit of analyzing multiple variables in a focused diagram. These charts may also be grouped with other multi-variable charts used by advanced traders, such as level 2 quote charts or depth of market (DOM) charts. Many advanced charting providers offer multi-variable quoting systems that can be purchased on a subscription basis as an add-on 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 top brokerage companies to allow for trade automation. MarketDelta also offers many different customizable data feeds for an additional fee.

Footprint Chart Variations

There are several types of footprint charts that may be available through a charting provider. Some of the most common footprint charts used by traders include the following:

  • Footprint profile: Shows traders the volume at each price through a vertical histogram, in addition to the regular footprint bars. The footprint profile allows traders to see at what prices liquidity is pooling.
  • Bid/ask footprint: Adds color to the real-time volume, for easier visualization of buyers and sellers probing the bid or ask. With this footprint, traders can see whether the buyers or the sellers are the responsible parties for influencing a price move.
  • Delta footprint: Displays the net difference at each price between volume initiated by buyers and volume initiated by 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 aims to help traders determine points of capitulation.