In a given market, prices will move upward until they reach a point where no one is interested in buying. Conversely, prices will move down until they reach a point where no one is interested in selling at that level.
In the chart above, you can see the pressure of the zero bid at the highs of the price bars marked with black arrows. A zero bid at the highs of a candle tells you that the market never rose above that level, there just weren't enough buyers.
You can also see the same scenario on the sell side, where there is zero pressure on supply at the lows.
The zero supply tells us that the price couldn't go a tick higher because there were no passive buyers who wanted to buy. Similarly, we can see where there were no passive sellers when there is a 0 on the supply.
Unfinished deals or an unfinished auction occur when there is no zero at the top of the bar on the bid or at the bottom of a bar on the offer. Unfinished auctions act like magnets that pull the price back to them. It is likely that the last buyer in the auction was not found in an uptrend or the last seller in a downtrend when an unfinished auction occurs.
Uptrends end when the market reaches a price where there are no more passive buyers looking to buy. Bearish trends end when the market reaches a price at which no passive sellers are looking to sell.
A passive buyer or seller is simply a buyer or seller who is more interested in long-term profits, as opposed to a day trader who wants to scalp profits from smaller moves.
Unfinished auctions in and of themselves are not a trading strategy. As you will see later, I use unfinished auctions to confirm whether a high or low has been set and to identify a possible new trend. They are very useful for validating trades, and I will also use them for price targets, which I will see later.
What software offers a footprint chart?
For the footprint chart you need a special order flow or volume trading software. This software is mostly designed for stocks and futures. You will find professional indicators there, which most Forex and CFD brokers do not offer.
I can recommend the software Metatrader 4 Exness. It is very user-friendly from my experience and offers many setting options for the footprint chart. You can use it to analyze the markets perfectly. All videos and screenshots on this page were also made with Metatrader 4.
Which markets can be traded with the Footprint Chart?
With the Footprint Chart you can view all exchange traded values. This includes forward contracts (futures), stocks, ETFs, government bonds or commodities. Forex (spot) and CFDs cannot be analyzed with the Footprint Chart. For Forex trading, the futures contract must then be selected. There are 2 markets: interbank market and futures market.
- Futures/Futures (Forex, Commodities, Bonds)
- Exchange traded assets
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