TradingView's NEW Volume Footprint Chart: Tutorial

in this trading view tutorial you're going to learn all about volume footprint chart types how to use them how to access them and what they do for you now the first thing you'll see here is we have volume footprint selected and when you're zoomed out we are on a daily chart but this also works on other time frames as well we're going to walk you through it on a daily chart you'll notice that the volume footprint has been selected because we can see these color gradients of buy volume and sell volume for each specific daily candle now the magic really begins when we zoom in on the chart because you're going to see the data appear before your eyes and this is where the volume footprint chart really begins and starts to show its capabilities so the first thing to know about the volume footprint chart we're going to try to speed through this introduction then get more advanced as we go is that off to the right you are going to see what's called buying volume and that buying volume is shown in these specific Footprints or these specific boxes or rows and it is broken out by the amount of volume at specific price levels to the left is the selling volume and it's the same thing you are seeing these specific rows or boxes demonstrate how much selling volume occurred in the middle is the Candlestick we are on a daily chart so each Candlestick is a daily Candlestick just like you're used to so if you were on a normal Candlestick chart right there's no difference the key thing here is that when you have volume footprint chart type selected you are not only looking at the daily Candlestick but it comes with the volume footprint capabilities to see buying volume to the right of that Candlestick and selling volume to the left of that Candlestick that is the key detail about volume footprint charts and as we mentioned it could work on all of these different time intervals the key thing now to understand is the data and what comes with these tools so let's talk about this data that's presented to you below and even these numbers down here at the bottom of the buy and volume and selling volume so first of all we're going to talk about total well total is just what it sounds like it is adding up all of this buying volume in all of this selling volume and showing you the total amount that is the total amount of volume in this specific Candlestick also you can see the total buying volume right here below all of the buy rows or buy boxes that's the total or the selling volume these are all of the selling boxes or selling rows and when they're added up that's the total so if you add these two together you get your total here but where the tool now gets really powerful is the Delta number that's displayed because this is showing you whether there's more buying volume or selling volume if it's green you know there's more buying volume and by how much now we're going to show you a real world example of how this is so interesting so we are looking at Reddit rddt check out the last 3 days of trading look at yesterday look at the Delta fairly massive Delta in terms of buying volume vers selling selling volume look at the day before fairly massive Delta in terms of buying volume ver selling volume now look at the price when this Delta became as large as it is so it was it was down here moved up here moved up here the delta in buying volume may have demonstrated the move that was on the way or in the process of happening and if you zoom out you can really get a feel for the different deltas just by zooming out looking at the different colors engaging these specific numbers and helping or using that data to make more informed decisions to get a feel on the difference between buyers and sellers now the next thing about the volume footprint chart that is just absolutely key to know is that just like any other chart type when you doubleclick you can open up your chart settings of course you can also use your chart settings up here at the top right now the first thing to keep in mind here is that as we mentioned there are candlesticks so you have the capability to customize your candlesticks as needed in fact you could technically even hide the candlesticks and just look at the volume data the choice is yours but we're going to keep our candlesticks up here for now and if you are already familiar with candlestick charts you are well on your way because now scroll down and you're going to see volume footprint this is where the key details really begin now the row size by default is set to Auto and the ATR is set to 14 so what's happening here is that the trading view platform is automatically calculating how many rows are going to be shown for this specific chart in this case we have 1 2 3 four five six same for selling so we're seeing six buying rows with specific volume and six selling rows with specific volume it's Auto and it's using ATR length of 14 this is average true range of the last 14 periods we're on a daily chart so it's the last 14 days but if we wanted to see if maybe just the last 5 days changed the data and look at that it sure did then we're just using the last five days to automatically show how many rows we should see you also have the capability to manually calculate the amount of rows you want specifically by ticks per row if you're an advanced Trader whose trades based off specific tick or you're using tick data specifically for your trading well you can create a manual visual just by clicking manual and then telling the trading view platform how many ticks you want per row and check this out we can just see how granular the data got for this video and probably for most use cases you're going to want to keep your row size to Auto and it's up to you if you want to use 14 this is a very common and widely used average true range length so we're going to keep it on 14 for now the next thing to understand about the volume footprint chart is the type because after all this is the power of the chart type we have buy and sell by default selected and that's just what we explained here's your buying volume and here is your selling volume but if we wanted to just look at the Delta we could and the Delta is just what we were talking about earlier you are looking at the delta or the difference in buying volume ver verse selling volume all displayed right here before your eyes so we can see the buying volume here and we can see the selling volume here but the it's just the difference it's not the total amounts it's buying volume minus selling volume and you're getting your output here if you don't care so much for buy volume or sell volume just click total and now you've got the total amount of volume at each price level and the good thing about this tool is it's still not just a volume profile or some volume visual because if you look at the data window window below you can actually still get the data you need total buy total sell and the Delta so you've got all of your volum volume and then you can still get this data that comes with the volume footprint tool by default we're going to keep it to buy and sell and we're just going to keep working our way down through these different settings now apply gradient to background ladies and gentlemen you're going to want to understand this because everyone has different charts looks and feels that they need and want so this is called the apply gradient to background feature and what it's doing went on is showing you the areas that that had the most volume so look at the difference between this color down here and this color up here and look at the size of the numbers that are shown this is way larger than this and thus it's this brighter red it's meant to draw your eyes toward it same with the green as well so the gradient is automatically showing you extreme levels in addition you can customize the color of these extreme levels depending on your needs with the furthest to the right being the most extreme and the furthest to the left being the lowest so if we don't want to miss this sort of cell background we want the extremes to pop to us why don't we make it sort of this pink color for sell and for green let's make it this bright lime green for buy and that way we just can't miss this data now in addition what you'll see here as we move down is that some of these specific some of these box did not change because point of control so why is this box white and why are these Green Well the reason why these are still white is because they are the point of control which you can see just by this checkbox PC means point of control if you don't know what point of control means it is the area that attracted the most volume so you've got your extreme levels here but you still have your most extreme as always as the point of control the most volume happened whereever ever you see this sort of white box but remember you can turn this off and now you've only got the extreme levels shown or you can even change the color so you're always reminded that blue is the point of control so what we're doing now is creating a highly custom volume footprint chart to our liking you could do the same thing with these colors and maybe design a strategy or research process around them for example each time an extreme level is hit outside the point of control maybe you set an alert so that you're instantly notified these are different ways you can think about this tool in addition you can show or not show the summary info the summary info is everything that we've spoken about already in this video on or off as needed now next up we are going to talk about value area in a second but we want to get to inbalance because it is so important now value inbalance is absolutely important when it comes to the volume footprint tool because it is showing you the most important levels buy specific imbalances which means how much more buying volume or selling volume was there at that level and you can highlight them as needed as well so for example if we change this to 500% what you're going to observe here is you're going to observe these highlights see these highlights at the edge of each row these highlights are meant to show an imbalance and that imbalance is supposed to catch your attention you can also change the color of these imbalances if they're just maybe a little too hard to see so you can see the yellow so that's going to happen on the buy side or you can change the imbalance for example to a color you can't miss on the sell side so we've got yellow and pink hair you just simply can't miss it it's showing us 500% inbalances on the volume footprint and the whole point of that is to try to catch an area whereby there's something notable happening relative to the buying volume and the selling volume and that's can catch your attention for different trading reasons also you can do this the Stacked level feature which is designed to show you the levels where there are stacked imbalances so we've got 500% meaning we're looking for balances that are 500% imbalances that are 500% or more of that specific area then we have stacked turned on to three which means any Zone on this chart where there are three one two three imbalances let's highlight that and then this is a tool to be used specifically for possible support zones and it will also work on the cell volume and it will still cut across the chart you can see the colors here cutting across the chart if we of course increase this to five we probably won't have much yet if not at all that's going to be very rare what if we go to two so just look for two stacked levels and it's similar to three but the point is is we can instantly identify those stacked levels when this is toggled on and defined as such now ending up on value area the reason why we waited for this until the end is this is just like your volume profile indicator you get to define the area where 70% of all volume occurred and you can see that based on these little arrows these are your volume area highs and your and your value area lows vah value Area High V value area low so it's showing you that 70% of all volume happened between these two little notes Here 70% of all volume on this current Day live trading is happening all volume happened so with that being said ladies and gentlemen that is the full walkthrough of the volume footprint chart type including how you can utilize it and how you can also access it and add it to your trading view chart so we hope that you enjoyed this video I'm Steph as always always I help make many of these educational videos I'll be bringing a lot more to you I hope just to teach many of you about trading and investing thanks so much for watching

Channel: TradingView

Views: 63,651

Keywords: TradingView, Charts, Traders, Investors, Trading, Investing, Technical Analysis, Fundamental analysis, Stocks, Forex, Crypto, Options, Futures

Id: 0WggFVVsmkM

Length: 13min 8sec (788 seconds)

Published: Tue May 14 2024