- how I find my favorite liquidity levels
- indicators I use to aid in finding them
- session candles
- daily high/lows
- pivot rays
- preferred timeframes
pivot line indicator
a simple indicator I had made to suit my needs in marking out pivot/fractal highs and lows by extending the rays out.
pivot line indicator (2)
the concept -
look for a series of either higher lows or lower highs on this indicator which do the following:
- remain untapped
- are close together
- have a decent gap after them before the next swing pivot.
stop orders/triggers → triggered at market and most of the time forced with someone being forced out the market (stopped out).
note - pattern/breakout traders in general can also use trigger orders to buy/sell the breakout.
footprint charts:
displays ONLY market orders.
most common setups is to see market sells on the left with market buys on the right → bid-ask profile
I find footprints the best for spotting absorption or exhaustion in the markets as they display already transacted data.
i.e when you see lots of sell orders at the same price level without price able to budge it is sufficient evidence to say limits are holding up price.
footprints do not have to be shown on time based charts only either, they are extremely useful when monitoring volume charts, delta charts or range bars, in particular on lower time frame equivalents.
tldr: footprints show a record of already transacted orders, unlike heatmaps displaying resting orders, which have the ability to be pulled/added to.
the naming is meaningless, the core fundamental behind it is that there is a piece of price which price moved quickly through (one candle), relative to the time frame you look at.
first touches:
when price initially revisits this void it can act as a level where:
1. stops are triggered 2. traders attempt to trader for the fill (anticipate a move)
the edge then comes from being able to spot these traders at this initial touch and fade them.
footprint charts are a cleaner visual of the time & sales data.
it places buy/sell info on a per cluster basis, inside the candle.
doing this allows for easier identification of high volume/delta zones, absorption & trapped traders.
tick sizes:
inside the footprint, the cluster is divided into price blocks. Changing the tick size changes the granularity of these price blocks within each cluster.
larger tick size for increased volatility, lower the tick size when less volatile.