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How to Interpret the FootprintWe often receive calls or emails from customers and those investigating the Footprint about the best way to interpret the Footprint chart. While interpretation is a slippery slope, I wanted to record a video that shows just one approach of how this valuable information presented on a Footprint chart can be interpreted. As you will see during the video, I used the Playback feature built into MarketDelta. You can learn how to use this here. The playback feature is an extremely useful tool for learning how to read and interpret the Footprint chart because you can go back and see how a move, pullback, reversal, etc. developed. If nothing else, this will greatly aid in your understanding of how markets operate and trade. The key things to remember from the video are: Seminar Re-cap and Powerpoint SlidesLast Friday we hosted a room filled event of about 150 traders, Dr. Brett Steenbarger (http://traderfeed.blogspot.com), and myself. It was a fantastic, free event where I did a short Powerpoint then spend the remaining 1.5 hours giving a live demo using realtime data and fielding questions from everyone. Dr. Brett would add his insightful comments along the way and then we would role play as a traders coach (Dr. Brett) and the trader (me). There were some funny moments (but very realistic). Dr. Brett followed with a lively presentation and lots of questions and examples. He does such a good job of communicating the concepts so many traders struggle with and sheds light on how professional and institutional traders perceive the market. It was very interesting, whether you were a novice or professional trader. If you missed it, we hope you don’t miss the next one! We are planning on doing a similar webinar event later this year for everyone who was unable to attend. Stay tuned the date and time. In the meantime, below is a short video that describes some of what was talked about and describes the chart used for most of the presentation. Downloadable PDF’s of both presentations A Simple RTL Application: Shading the Overnight SessionSpecial Note: the functionality I describe in this article requires the Pro version or higher of MarketDelta. Here is the chart I employ for my larger time-frame analysis. I often vacillate between including overnight data in my analysis or not. Recently, say over the last couple years, it’s clear that overnight activity is often as important as the regular trading hours. On the other hand, while I want to see this overnight data, I want to be able to clearly delineate between overnight and regular hours.
Well, one way to do that is simply flip between session overrides. That’s fine, but in my estimation, something is lost when you do that. I want to see all the data, but yet at a glance separate it. Well, here’s an easy way to do it. I first created a signal formula which would return a true value for any bar before 8:30 or after 15:15 (my local time). Here is the formula: (TIME < = 0830) OR (TIME > 1515) Now, instead of applying the signal directly to the chart, I added a Paint Bars indicator, which can “paint” based on a signal (which is chosen from the indicator preferences window). I also set the indicator to paint the background instead of the bars. Here is the link to Charthub which contains the definition for the chart and the signal: http://www.charthub.com/images/2009/07/07/rhONshading.png Hope some of you find this useful! |
