A candlestick chart conveys quite a bit of information to the trader. At a glance you can quickly see opening and closing price, as well as the high and low price within the time period that candlestick represents. Candlestick shapes are also very good at spotting bearish and bullish action, giving “clues” as to who is in control. There’s little doubt that candlesticks are a vast improvement over Hi-Lo Bars or line charts, as they provide rich, contextual information from which to make trade decisions.
As good as candlesticks are, they still don’t answer the fundamental questions of… WHO IS in control, and how well of a job are they doing in gaining that control? If you knew the answers to these two questions, then you could anticipate, with a fair degree of confidence, the likely direction of price before the next candle is even printed. Unfortunately there are no online charting programs, or charting standards, that provide this kind of qualitative information.
But! There is a tool out there that will not only provide qualitative information into the structure of a candle, but also provide rich quantitative information, letting you profile and dissect the forces of supply and demand—sellers and buyers—like a CSI investigator. The big difference is that this is done in real-time, not after the fact! The tool is called MarketDelta Footprint™.
MarketDelta’s Footprint™ allows you to peer inside a candle like it’s a window onto the trade floor of the Chicago Mercantile Exchange, only it’s even better than that! Better because you get the information in real-time, and presented in aways that allow you to answer those two fundamental questions—Who is in control, and how good of a job are they doing. The MarketDelta Footprint is used in the AppleInvestor Trade Room.
The basic Footprint™ adds volume and bid-ask data in both numerical and graphical form. With the numbers you can actually see in a quantitative way where the buy and sell pressure is coming from at each price level that a candle spans. With the graphical representation you can see volume and visualize the Market Profile™ or market structure that is forming.
So, in a nutshell, this in fact answers the two questions, so with just a glance you can immediately tell who is in control, how well they are doing, and whether or not that control is getting stronger or waning. When you combine this window into the auction with volume stats or volume or price delta indicators, it becomes relatively easy to spot the nature of a trend or a pending reversal. After becoming familiar with this tool, you’ll wonder how you ever did without it!