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00:00:00 – 00:13:38
The video discusses how footprint charts revolutionized day trading strategies post the rise of algorithmic trading. Key points include understanding bid-ass charts, Delta, and volume footprints for effective trading. The importance of identifying market imbalances and unfinished auctions is emphasized. Strategies for interpreting bid-ask data, utilizing imbalances for support/resistance levels, and analyzing Delta for entry points are covered. The concept of Volume footprint is introduced to identify support/resistance levels and manage trades effectively. The video recommends software options like MotiveWave for market analysis, promoting experimentation with these tools for trading enhancement. The speaker pledges to provide further content to aid aspiring day traders.
00:00:00
In this segment of the video, the speaker discusses how footprint charts helped them reinvent their day trading strategies after experiencing challenges due to the rise of algorithmic trading in 2008. They explain how footprint charts offer critical insights for building context, validating setups, and timing entries and exits. The speaker shares their journey from relying solely on level 2 trading to developing new strategies focused on executed orders by studying volume and testing different indicators. They emphasize the importance of footprint charts, specifically the bid-ass, Delta, and volume footprint styles, in trading various markets effectively for day, swing, and long-term trading. The bid-ass footprint is introduced as a tool to identify market imbalances and unfinished auctions.
00:03:00
In this segment of the video, key points include understanding the difference between the asking price (what you pay) and the bid price (what you receive) when trading securities. Market order actions are explained – buying is referred to as taking the offer or lifting the ask, while selling is hitting the bid. The trading dome, or depth of market, shows resting limit orders. Volume in green represents market orders hitting the bid, while red volume is from market orders taking the offer. Imbalances in the market can be analyzed using these volume values, with 300 percent often used as a significant threshold. Specific strategies and examples are explained for interpreting bid-ask data.
00:06:00
In this segment of the video, the speaker discusses how to use imbalances to find high probability support and resistance levels in trading. Large buying imbalances act as support, while large selling imbalances act as resistance. The speaker explains how to use buy and sell imbalances to identify entry points and potential reversals. The concept of finished and unfinished auctions is introduced, with finished auctions indicating price levels where buyers or sellers are inactive. Unfinished auctions can help in determining take profit levels. The speaker also mentions the Delta footprint as a powerful tool for day traders, explaining how volume Delta is calculated and used to identify buying or selling pressure. The bid-ask handle and Delta candle are compared to show trading activity based on volume.
00:09:00
In this segment of the video, the speaker explains the concept of Delta in trading, which is the difference between offer volume and bid volume. They demonstrate calculations showing negative Delta values and discuss how Delta and price movements typically align. The speaker also talks about Divergence between price and Delta, where price and Delta move in opposite directions, indicating potential reversals. Additionally, they introduce the volume footprint, highlighting key elements like high volume nodes, low volume nodes, point of control, and distribution. These components can be used to identify support and resistance levels, play reversals, and manage trades effectively based on volume analysis.
00:12:00
In this segment of the video, the speaker introduces how to use footprint charts to enhance trading strategies. They recommend trying out popular software options like MotiveWave, Sierra Chart, and QuantPower for analyzing market data. The speaker personally favors MotiveWave due to its compatibility with Mac OS. Various software platforms are discussed in detail in another video linked in the description. The speaker encourages viewers to experiment with these tools and provides a promise to produce more helpful content for aspiring day traders.