The footprint

Back in the stage on reading a chart, three completely different afternoons produced an identical candle, and the article ended by saying the sequence and the participation were gone. The footprint is the tool that gets the participation back.

Mak · 3 min read · Stage 7, article 5 of 9

What it draws

A normal candle is one shape covering a price range. A footprint candle is that same range cut into its individual prices, with the volume that traded at each one written in — and split into two columns:

Left — volume that traded at the bid. Aggressive selling.
Right — volume that traded at the ask. Aggressive buying.

That is the whole idea. Everything else people do with footprints is arithmetic on those two columns.

Diagram 1. The four numbers of a candle become several dozen. The skill is not reading all of them — it is knowing which two or three questions to ask.

The three things worth looking at

A footprint is a wall of numbers, and the beginner's mistake is trying to read all of them. Three questions do most of the work:

Where inside the bar did the volume happen? A bar whose business was all at the top is a different event from one whose business was at the bottom, even if they close at the same price. The heaviest price in the bar is often marked for you.
Where did the two sides disagree sharply? Price levels where one column dwarfs the other are called imbalances, and they have their own article next but one.
Did the aggression and the outcome match? Heavy buying at the top of a bar that fails to close there is the single most interesting thing a footprint shows, and it is the subject of the article on absorption.

Two requirements, and neither is optional

This is the point at which the earlier stages stop being background reading.

It needs every trade: A footprint is built by counting individual transactions. Fed a periodic snapshot instead — the warning from the article on market data — it still draws, with numbers that are a summary of a summary and nothing to tell you.
The split is inferred: «At bid» and «at ask» are worked out from where each trade printed, not reported by anybody. Usually right, occasionally impossible, and different platforms resolve the edge cases differently — which is why two screens can disagree by a few contracts and neither is broken.

Why it is worth the trouble

Because it answers the question the whole path has been building towards. A candle tells you price went from here to there. A footprint tells you what it cost to get there — how much had to be bought, at which prices, and whether anybody was standing in the way.

Two bars that look identical on a chart can show, in a footprint, a market that walked upwards unopposed and a market that had to buy through a wall the whole way. Those are opposite situations, and it took this path four stages to be able to say why.