4 Footprint Setups for Maximising Your Profits 

What are the difference between profitable and losing traders?

One of the things that separates them is that successful traders add to winners (double up to maximise gains), and unsuccessful traders add to losers, in a hope that price will reverse and they will get back to breakeven faster.

In this post I will share notes on 4 Footprint setups, which I actively use in my trading both to enter the initial trades and to double up on the running, winning trades.

The full training is available on YouTube: https://www.youtube.com/live/AzoMsYbLBAw?si=g33SncYTx6UIY-9X

Let’s start with the basic understanding of the Footprint before we move on towards the technical side of things.

Traders who have never had experience with footprint before usually get confused about the assets they can trade using these techniques. I wanna clarify it right away: using footprint, you can trade pretty much almost anything. This includes:

• Stock index futures (ES, NQ, RTY, YM)
• Energy and metal futures (Gold, Silver, Platinum, Palladium, Oil and Natural Gas)
• Stocks
• Currency futures
• Forex and CFD (you will only need to transfer the data from futures to forex in this case).

Since we are already talking about forex, I often get the question of why did I shift from forex to futures.

Allow me to make a quick comparison:

FUTURES are CENTRALISED

Which means that everybody on the planet sees the same price and volumes traded. No manipulation on the brokerage side, no issues with spreads, slippages and no fake candles.

FOREX is DECENTRALISED

Which means that only people who use the same data feed provider (broker) see the same price and volumes. Decentralisation opens the space for manipulation on the brokerage side: fake candles, huge spread, slippages, price differences and gaps.

I’ve quickly realised the advantages of futures, but they don’t end only on either manipulations are present or not. Futures allow us to get access to footprint and to see the orders of all market participants in the world and analyse how much volume was traded on the Bid and Ask. Since data is decentralised in forex, you cannot see the real orders of other market participants - only those, who use the same broker, as you do.

So, what about Footprint?

Most people get confused when seeing it for the first time. To make it easy to digest, let’s start by going through the bases of why does the price move?

WHY DOES THE PRICE MOVE?

If you’ve been trading for a while, you are aware that there are 2 types of order in the market: market orders and pending orders. For the sake of understanding footprint, we will call them “Aggressive orders” and “Passive orders”.

AGGRESSIVE ORDERS   

Aggressive orders - are the market orders. (Buy / Sell by market)

Traders use these orders, when wanting to enter the trade immediately, right now, without specifying the entry price. (Meaning, the trade will be filled by the first available market price from the passive buyer / seller)

• “By market” buyer will buy from the first available passive seller (Buy by market x Sell limit)
• “By market” seller will buy from the first available passive buyer (Sell by market x buy limit)

PASSIVE ORDERS   

Passive orders – are limit, pending orders. (Buy / Sell limit)

When the traders want to enter the market using buy / sell limit order, they specify the desired entry price and patiently wait, until aggressive traders accept their desired price.

• To fill the passive sell limit order, the aggressive buyer is required. (Buy by market x Sell limit)
• To fill the passive buy limit order, the aggressive seller is required. (Sell by market x buy limit)

Let’s have a look at some images below to visually represent how passive and aggressive orders are reflected in Footprint:

Therefore, the left side (BID side) reflects order of either aggressive sellers or passive buyers, and the right side reflects aggressive buyers or passive sellers.

It all might seem like lots of theory, but this is absolutely necessary for the footprint understanding, so bear with me.

The last thing I need you to know before moving into the fun part of trading setups are: VOLUME and DELTA.

You’ve all heard about volume in trading, but far not everyone understands what volume really means, so let’s clarify it:

Volume is a summary of all Ask's and Bid's for the chosen period of time and price range. In other words,

So what about DELTA?

Delta is a difference between Ask's and Bid's for the chosen period of time and price range. In other words:

With those settings, if Delta is ask - bid, then the footprint cell (cluster) is GREEN if the number on the Ask is larger than the number on the Bid. (In other words, cluster is green if the delta is positive)

The footprint cell (cluster) is RED if the number on the Bid is larger than the number on the Ask. (In other words, cluster is red if the delta is negative)

That's how it looks on the footprint:

Phew! That was a lot, isn’t it?

Well, no worries, we are past the “boring” stuff and if now you understand everything which was said before, you are good to move ahead into the trading setups.

Let’s talk trading!

4 FOOTPRINT SETUPS TO MAXIMISE YOUR PROFITS AND MASTER ENTRIES

I use those 4 setups as both triggers for initial entries and extra entries, when I want to double up on the running, winning position. You can be creative and twist those setups also into confirmations of exiting your running trade.

Only one thing that you shouldn’t be doing by any means is to adding to your position, which is in loss. That’s the straight way to blowing your deposit and leaving trading career!

SETUP 1

HIGH DELTA CLUSTER WITHIN A TREND

I use this setup both for initial entry and extra entries, when I want to double up on the running position. It is all about where the price goes after forming the high-coloured delta: if the candle with high delta closes bullish, you will be looking for the continuation of the upwards move. The opposite will apply, if the candle with high delta closes bearish - you will be looking for the continuation of the bearish move.

The algorithm is the following:

1. Identify the trend
2. Wait for the high-delta to appear.
3. Check if the candle with the high delta closes bullish or bearish, and expect the next move accordingly to the closure.
4. Place buy limit entry 1 tick above the high volume delta, if the candle closed bullish / sell limit entry 1 tick below the high volume delta, if the candle closed bearish

Check the examples with explanation below:

SETUP 2

STRONG LEVEL

I use this setup both for initial entry and extra entries, when I want to double up on the running position - depending where the strong level was formed. It can be formed in the trend and will be used similarly to the setup 1, or it can be formed as a reversal - and will be used as an initial entry confirmation.

The definition of the strong level is 2 or more high delta to be formed one after another at the same (or very similar) price level.

Check the examples with explanation below:

SETUP 3.1

STRONG BEARISH DELTA IN THE SUPPORT ZONE

The meaning behind this setup is the following: if the strong bearish delta is formed in the support zone, or if the strong bearish delta was formed and the price went up afterwards, those were possibly the passive buy orders, that got filled there and pushed the price up.

The algorithm:

1. If it is the trend reversal, you will be placing buy limit 1 tick above the bearish delta price level - both for initial entry and for doubling up.
2. With some creativity, you can use this setup as a trigger to exit the trade.

Scenario 1: your sell trade is in profit and this setup was formed. You know now that with the high probability, the price will continue to go up for a while. It's time to close your trade with profit.

Scenario 2: your sell trade is in loss, but didn't reach your stop loss yet - and this setup was formed. You know now that with the high probability, the price will continue to go up for a while. It's time to close your trade and cut (limit) your losses.

Check the examples with explanation below:

SETUP 3.2

STRONG BULLISH DELTA IN THE RESISTANCE ZONE

The opposite will apply when the strong bullish delta was formed and price dropped afterwards. You will be expecting the reversal to the downside and placing sell limit entry, or, accordingly, exiting your long trade.

SETUP 4

STUCK CLUSTERS

Last setup for this article and appears to be one of the strongest confirmation. You are looking for the cluster stuck together, when bullish clusters are pressing on bearish and vice-versa.

In this trading setup, it all depends on where the price goes in the first few candles after the stuck cluster formation appears: it can be used in a trend or in reversal, for long and short trades, or for exiting the running trade if the first move after stuck cluster was against your running idea.

The logic behind is based upon the observation, that those stuck cluster contain so much volume, that it will be holding the price from breaking through it any time soon.

Check the examples with explanation below:

I hope those setups and in-depth explanation will help you to level up your trading game. If you've never used footprint before, it might be a good moment to give it a go.

If you've got any questions left, reach out in the comments on my telegram channel:

https://t.me/nonefinancialadvice