PRIOR KNOWLEDGE CHECKLIST:

1. Bid/Ask
2. Aggressive and Passive

$$ \LARGE\textsf{STRUCTURE OF THE FOOTPRINT PT1} $$

The Footprint Chart is the most commonly and widely used ORDERFLOW tool out there. It’s simple, efficient, and has limited downsides. Every single trader should understand how to read one. Despite their scary appearance they are extremely easy to quantify and understand.

We have already been over how the Bid/Ask works(?), and how limit orders get filled. Now we can discuss one of the most common methods to read ORDERFLOW; the Footprint chart!

Orders are constantly being exchanged across the spread(?). The method we use to represent these orders is ingenious!

The Footprint chart shows where contracts have been exchanged for each tick.

$$ \LARGE\textsf{~~~READING THE FOOTPRINT} $$

Note: This is how I have my footprint settings. Other footprint charts will look different, but generally follow a similar structure.

The Footprint chart shows completed orders represented as numbers on the left and right of the candle; the Bid (left) and the Ask (right)

IMPORTANT!!!!!:

• Since we know that Limit orders get filled on the opposite bid/ask aggressive orders do(?), we need to make inferences on where the buyers and sellers actually are.

Just because we see limit orders in an area, doesn’t mean we just reverse. It simply means it’s slightly harder for aggressive orders to push through.

$$ \Large\textsf{~~~~~STRUCTURE OF THE FOOTPRINT PT2} $$

$$ \large\textsf{~~~~~~Ladder} $$

When reading a Footprint chart, you compare orders diagonally; like a ladder.

You’re comparing the 56 Ask, to the 5 Bid.

You’re comparing the 45 Ask, to the 3 Bid.

And so on.

• Can you think of why?

$$ \large\textsf{~~~~~Delta} $$

Depending on the platform you are using, the background colors are calculated across instead of the factual ladder way.

• This is just highlighting the delta between each tick.

$$ \large\textsf{~~~~~~Imbalances} $$

Whenever the opposing contracts are X times larger the order is highlighted.

Most platforms allow you to change specifically what ratio you want highlighted.

Some people draw zones over Stacked Imbalances and wait for reactions.

YOUTUBE VIDEOS

FUTURES FLOW

• Video

JUMPSTART TRADING

• Video

$$ \Large\textsf{~~~~~EXAMPLE} $$

In this picture passive, aggressive, and unknown clusters are highlighted.

• Generally Stacked Imbalances in the body of a candle are aggressive orders.
• Generally Stacked Imbalanced in the wicks of candles are passive orders.

It’s easier to spot historically where passive orders have been transacted.