so candlesticks are great and that's what we're all familiar with but imagine you can actually go in depth to a Candlestick and understand the interaction between buyers and sellers that have happened within each period on a 5-minute candle a 15minute candle and essentially see the real action behind them the way we do this is by looking at footprint charts so in this video I want to break down what footprint charts are the different type of footprint charts understand the auction between buyers and sellers and essentially how to use footprint charts to our advantage so with that being said let's dive into it so here we have the Candlestick chart which everyone is familiar with now when we look at a footprint chart what we're able to do is we're able to go inside any single one of these candles and we're able to go deeper right so I'll take this candle I'll go deeper and I'll be able to see right all of the transactions happening here every single transaction now this looks like a lot of numbers and numbers all over the place and this may confuse some people but we are going to understand what this is we are going to understand a full understanding of footprint charts the interaction of buyers and sellers types of footprint charts and how to use this so let's understand the interaction first so you guys see two sides right there's one side on the left right and one side on the right okay so these two sides the side on the left is the bid the side on the right is the ask okay so essentially the market is a big auction right there is where the market facilitates trades between buyers and sellers now these are few things I want you guys to understand on every single trade there's usually an aggressor I'm just going to put AGG there's usually an aggressor a a participant that wants to be aggressive be it the buyer be it the seller whoever's the aggressor is typically going in with a market order they're saying I'm willing to pay whatever I want for this particular security at this time so I will be the aggressor I will go in with market prices then you have a passive participant I'm just going to put pass who usually goes in with a limit order these are participants that are passive and they're very important too but their order types are limit orders so once again we have passive participants and aggressive participants aggressive participants are going in with Market orders passive participants are going in with limit orders okay now when we look at this as mentioned we have the bid on the left and we have the ask on the right now bid ask now if there's an order for let's say 4585 4585 and there's one contract traded there's typically one participant that is aggressive either the buyer or seller the way we see that is by looking at the footprint chart so when I look at this 0167 what this is telling me is someone had an aggressive order to buy 167 contracts at this price an aggressive order to buy hence why it is on the ask side now if someone has an aggressive order to sell they are willing to sell to the next buyer so in this predic predicament there was two contracts that were aggressively sold 266 contracts aggressively bought that was the transaction type so when we go deeper and deeper within this we are able to see that interaction we are able to see something that is a finished auction something that is maybe unfinished auction which I'll talk about as well but once again when we see this in terms of interaction we're able to see that hey 479 orders at this price got filled at the bid if it got filled on the bid and I want to ask you guys this just pause for a second thing if 479 orders got filled on the bid who was aggressive the buyers or the sellers right if there was 479 orders filled on the bid the sellers were aggressive if there's 975 orders filled on the ask on the right side that means the buyers were aggressive because the buyers are willing to pay a premium on price so they're willing to be you know aggressive if sellers are more aggressive they're willing to sell at a lower price passive participants are not willing to buy at a higher price they're willing to stay at the price they're at hence why they use limit orders so understanding this Dynamic is the most important concept of orderflow it is the most important concept of understanding the interaction of buyers and sellers now when we have this interaction our job then becomes to identify the interaction between the candles now as a Trader I'm not looking at every single footprint minute by minute or 5 minute by five minute and trying to analyze it I'm looking at Key level so for example I get into a key level and imagine I get into a key level and we hit that key level but we keep seeing aggressive buy orders but Market is not moving we see that a lot of participants are aggressively buying here but the market is not moving that means that there are passive sell that keeps selling to them there's a lot of Supply Here hence why we're unable to move and when that Supply is you know stays active and the demand dies down we start seeing it move down another scenario could be as we start moving up the aggressive buyers are no longer there the volume dries down which you know I'm looking down here the volume dries down and as volume dries down I'm seeing somewhat of a move down so when you see some of my videos videos and I talk about I'm seeing buyers in control or I'm seeing massive Supply this is what I'm talking about right so there's different type of footprint charts and like I said I'm going to explain more Concepts if you're still a little bit confused just stick through this whole video with me I promise till the end you will understand right so if you're seeing this this is a bit an Ask footprint right so like I said there's a lot of different type of footprint chart so on a bid and ask footprint you have the bid on one side you have the ask on one side what do theor represent right the colors are just representing on that line who is the aggressor so because this is red there are more aggressive sell orders as you can see 927 on the sell 531 on the bit 93 27 on the bid aggressively sold and 531 aggressively bought right indicating that sellers were like the Traders were more aggressive on the sell side here when you look here here you have 983 on the bid a th000 on the ask buyers or aggressive buyers were in control hence wide screen that's the price differential we're seeing right now going into different type of footprint charts as mentioned this is a bit and ask so I will go here this is the AAS platform like I said for Footprints you guys can use AAS you guys can use Sierra charts uh just preference what whatever you guys prefer but this that I'm showing you guys is atas uh platform right now if I go here and I want to kind of mess up my settings I can go and I can have different I can say show me the volume so in each transaction I see the volume now if I go to bid and ask see there's zero on the bid side 167 on the ask side if I hit volume now I see 167 1K 2K 2K and so on I might say I want to see volumes And Trades I can see that so I can customize this however I essentially want I can also make this color scheme Delta I can make it solid uh I can have none so if I have none you know and I just look at this this is just essentially showing me all the interactions but I can't see the Delta now you may ask what is the Delta what is what what do those colors mean essentially if there's 10 orders on the bid let's say we put B and there are 20 let's just say there's 30 orders in the ask the Delta here will be 20 right because there's a difference of the buy orders and the sell orders right so if I go into one these examples and I let's just say put in Delta right so if you look at this 0 and 167 if I just make this a Delta it'll say 167 and I can keep this a color let's make it Delta color see 167 hit the hit the ask 69 hit the hit the hit the uh hit the ask so the green are representing more orders are hitting the ask hence why it's green and the Delta numbers are just representing that so if I see a Delta of negative 313 at a certain level what that's is implying it's implying that there were about 3113 orders more hit on the bid meaning aggressively sold that is what that is representing when I look there right and as I mentioned there's a lot of different customiz abilities uh one way to look at is bit and ask profile right just like this uh some people may create this as a Delta some people may create this as volume I may have additional footprint of volume just to see where is the volume traded so if I look here I get like a clear identification of how volume is trading how Delta is trading and when I look at Delta for me what's important and I just just to kind of give you a idea of where and how I guess the footprint component is important uh if I go into let's say put the bid in ask and I go Delta right when I look here I like to see personally what is happening to price action right so if let's say I go up here what I'll see here here as a Trader is I'm seeing that on the F minute chart and this is a f minute for print as you guys can see and I can adjust this to a 10-minute I can adjust this to a 30 minute I can adjust this to whatever but you know for for this example I'm using a 5 minute so if I if I go into a particular trade right I can see where the AG aggressive orders are where the aggressive sellers are so if I look here let's say we just look at this action right this let's just understand this really quick so if I look here I can see that on the session as this instrument goes higher and higher right we keep going higher and higher we go higher we make a new high uh as we make a new higher and higher on every High participants are aggressive participants are aggressive on the high participants are aggressive now as they're aggressive uh there's there's a there's a few things happening with the orders right one thing that's happening with the orders the Delta for these kind of five minute blocks are staying stagnant most of the aggressive buying or if any aggressive buying is happening on the upper side as it's happening on the upper side what I see as a Trader most of the time is I see passive sellers being active that there's limit orders hitting these levels that's number one number two another thing I look at as we're going into key levels is I look for something called unfinished auctions so anytime there's a high or a low made in the in the movement right I look at those levels where the highs and lows are made and I identify if there is any sort of Unfinished auction so an unfinish auction looks something like this this is what I want to see as a Trader not this not this if we hit a high I want to see a zero on one side at least just just as basic knowledge right because that implies that you know Traders are in here traders in here they're aggressively hitting the ask and there's no orders on the other end the auction is wiped out auction is finished now of course we saw it here we didn't see it here and we saw it here right so it's not something where every time you see an auction finished you go and you think the market or the stock is going to go down the idea is if the auction hasn't finished on a high or a low there is a probability that the market will go there again to finish the auction and if and when it finishes the auction we might potentially reverse so that's one thing to look at another thing to look look at as I mentioned is to look for exhaustion and look for absorption right there are times where we can identify that certain trades are exhausted in terms of the big move so if I look at this right if I looked at this move right here just to give you guys some context right we look here let's look at the let's just kind of look at the candle right we see the Market opens Market opens strong makes a high here at 10:05 a.m. eastern time comes right back goes to this high of 458 so obviously a key key level once we come to this 45 85 essentially you know and and we come into these key zones I want to I want to look at the activity in these key zones and identify how the activity essentially played out so let me just uh you know kind of kind of look at where and how we can look at these levels so I go here just to see right this is kind of this is also kind of the low right just to just to look at the the markets in Inay activity and these are levels I want to see so as a Trader we open up we have some you know tough action going on here we Wick down here and as we Wick down here I want to see what goes on with the auction process what is going on and I want to understand that now when I understand something like this this is very important right what is going on here right there's a there's a lot of things going on and I want to explain that so one we get a very negative Delta 5 minute candle meaning that there were more aggressive sellers on this 5 minute full candle than there were aggressive buyers when I look at the candle I see most of the volume is compiling on the lower side of the profile this is showcasing the volume obviously we have a lot of volume built up here the interesting thing to me is this action of a candle is going into our massive demand Zone we go into a demand Zone with aggressive sell orders but the passive buyer step in now this is very important guys think about this imagine someone is aggressively selling something into a key level and once again the key level key zone is important but price holds what this means that we're getting a lot of effort but we're getting no reward right we're getting a lot of activity but that activity is not driving any sort of movement so because this is pushing like it's we're seeing a lot of aggressive sell orders but they're not getting rewarded meaning prices is not you know confirming as it should that means someone is passively buying so imagine with like an iPhone you start selling an iPhone for let's say iPhones you think are worth $1,000 you sell an iPhone for 700 and you're like okay well if I sell it for 700 and people keep buying it up and you're like holy people are buying it up people keep buying people keep buying and as people keep buying that showcases there's a participant or participants active here willing to absorb this sub willing to be aggressive and the aggressive selling someone is actively buying it up so don't also confuse aggressive selling to Market sellers are in control yes aggressive selling sellers are aggressive but a passive participant can step in and eat up the orders and you know on a footprint chart you might see aggressive Delta negative Delta that sellers are in control but they may you know the passive buyer may be able to drive the price up which is what happened here right the passive particip comes in and you know he or she's able to come in and and and buy up now some people may say well there's an unfinished auction so price has to come down no unfinished auctions are only contingent on lows and highs of the day this is not the low of the day the low of the day has been set so I don't care if this finishes or doesn't finish the auction what I do care about is when we hit the high as we go higher and higher I want to see unfinish or finish auction so as we go here see this is the high of the day unfinish auction finish unfinish finish and then we start rotating down but even when we go into the second level right and we start understanding what is happening we identify these key levels and you can see as we get to this key level right or we look at this you know kind of candle the interesting about this candle is when we look at this candle just as a basic candle I guess it's it's very interesting because we see this rejection but when I go deeper into this candle I can see that the most volume have happened here there was not a lot of transactions or activity happening above here or down here when I look here on this candle even though the body was here I'm seeing most of the transactions happen here so I'm able to see the shift in transactions and and I'm also able to see that with all the volume being here and us getting negative Delta that sellers are aggressively selling but price is holding that confirms the move of potentially going higher right we come into this move which is the second interesting part right we come into this move we start seeing that you know for for a short-term move we break this area with strength buyers are in control we see aggressive uh Delta strong Delta keep going higher and higher and as we get higher and higher some interesting things that happen is you know the the Delta isn't moving as strong with price moving up so as price is moving up I'm not seeing some real expansion on price movements I'm not seeing real aggressive buying step in price kind of starts balancing out so it kind of becomes you know a big question mark now if price wasn't balancing out and price wasn't moving up and we got strong Delta that's actually a good sign but you know if you look at the Delta for each 5 minute you know 593 27 here we're essentially flat the buyers and sellers are both kind of confused we come in here no real Movement we go in here no real movement and then right away when sellers do take control we do fill in that high of the day sellers come in the Delta goes extremely aggressive we get 4k on the candle we get a nice volume shift right sellers or Traders are in control not much activity second activity gets established and there's a lot of aggressive selling that is being rewarded meaning price is moving alongside with it then obviously you can see price starts flushing right so you know want to want to leave you guys with a few things really quick so candlesticks are great footprint charts allow us to go deeper now I don't want you guys to go into every single chart and start saying or every single action and start saying footprint charts NE are the Holy Girl footprint charts are just tools our job as traders to use the tool to our advantage use the tool to understand the interaction between buyers and sellers the places and the ways these tools are important they help us understand where we're getting imbalances where we're getting you know auctions that are unfinished where are we getting uh areas of absorption where are we areas of possible exhaustion right so where can we see where the activity is happening within a candle so it gives us this structure our job once again is to put that information with the context of the market we never want to look at an individual candle without understanding the context without understanding the session without understanding what is happening from a larger you know picture and take trades so for example this level 40 4585 may be a massive level that we have massive supplies level that we're going into maybe we might be into a massive demand level so our job once again is very important to identify these zones these levels that we're watching and why we're watching these levels why we're watching these zones right so if I was to just look at this right these levels have played a significant role right right these you know even even if I go back here right even this level just just for context purposes has played somewhat of a significant role so going back in history looking at the significant levels and understanding the context right and putting that context together with footprint charts is a is a great indication of understanding the market a few tools that are very helpful uh you know you have Market profile to understand where the market is balanced or ear balance uh you have footprint charts just to show you the activity of the auction and then execution wise you can just look at the Dom or even sometimes this it just depends on what your trading style is and if you do want to pick up this tool once again I'm not saying this is a Holy Grail tool or it's the tool that everyone needs you need to know where and how to incorporate it within your trading and you need to know what you are looking for so before you even go into applying this rule just understand the auction a little bit better understand how the participants get involved where they get involved and guys trading is kind of like an art right our job is to read what the market participants are doing and why and create create that story line to get the best possible trades that we can so with that being said I hope you guys enjoy this video and if you got up until this this long um I'm sorry for you know delaying uploading this video I've been wanting to upload this video for really really long period of time and if there's more topics you guys want me to cover just comment down below and I'd be more than happy to talk about more things that you guys want to hear from me and once again thank you so much for tuning in guys