Reversal Footprint charts – The best of 2 worlds

By combining the advantages of Level and Determine charts with the Footprint charts, we’re remodeling the way in which we analyze value motion and determine development instructions. This highly effective device not solely simplifies the method but in addition permits us to visualise the quantity traded throughout development reversals and market rotations. With ReversalFP charts, we’ve got the perfect of each worlds at our fingertips.

Notes:

Hello everybody,

As we speak we’ll discover ways to use the brand new characteristic known as reversal footprint charts or reversalFP charts that are primarily based on the Level and Determine charts. 

These P&F charts are helpful for simplifying value motion by ignoring minor value fluctuations. By exhibiting the path of value motion, it helps to determine tendencies and reversals. 

The adjustments in development are primarily based on how a lot the value strikes, not how a lot time passes, which helps merchants to be extra goal and clear of their selections. Later within the video, we’ll present you methods to modify the reversal settings that these charts use, and also will present a brand new possibility that we added.

Let’s open a chart, and select the JT ReversalFP chart sort. By default, it’s set to tick-based, and in addition, we’re solely loading someday of knowledge.

Earlier than we proceed, let me inform you a couple of issues in regards to the reversalFP charts. They are often both tick-based or minute-based, relying in your desire. 

Nevertheless, not all knowledge feeds assist each sorts. For CQG, Achieve, IQFeed, and Rithmic, you should use each sorts. For IB, you can not use reversalFP charts in any respect, and for Tradovate, you’ll be able to solely use minute-based charts.

One other factor to notice is the variety of days you’ll be able to load for every knowledge feed. This varies relying on the info feed’s API. For instance, CQG permits as much as 30 days of knowledge, Achieve and Tradovate enable as much as 15 days, Rithmic permits just one day, and IQFeed permits as much as 180 days of knowledge.

So, hold that in thoughts once you use the reversalFP charts.

Let’s return to our chart settings. 

Let’s go right down to the Histogram model possibility, and in right here you will see that the brand new added possibility known as quantity profile graded. Let’s chosen it and click on okay.

Let’s modify the chart in order that we will see all of the bars. 

We will see our reversalFP bars with that gradation impact the place the lighter colours point out larger quantity and the darker colours point out decrease quantity. The bars are additionally being coloured primarily based on their shut relative to their open. Blue bars imply they closed above their open, whereas the purple bars imply they closed under their open. You’ll be able to change the graded coloration within the settings, right here.

Let’s now have a look at the 2 major settings for the reversalFP charts, the field measurement and the reversal. These are primarily based on the principles for the Level and Determine charts .

The field measurement determines what number of ticks are in every field. By default, the field measurement is 1 tick. Which means that every field represents 1 tick of value motion. If we zoom in on the value scale, we will see every field, let’s contemplate the quantity histogram our field, it comprises 1 single value.

We will change the field measurement to a unique variety of ticks. For instance, let’s change it to 4 ticks. We click on Apply, so we do not shut the settings window. We will see that the chart adjustments accordingly. If we zoom in on the value scale, we will see that every field now represents 4 ticks of value motion. The value scale additionally reveals full factors as an alternative of quarters of a degree.

Trying now on the reversal setting, it determines what number of ticks the value has to maneuver in the other way to start out a brand new bar. By default, the reversal setting is 6 ticks. Which means that when the value strikes 6 ticks up or down from the earlier bar’s excessive or low, a brand new bar will start. Let’s return to 1 tick field measurement, as a result of with 4 tick field measurement, we would want a 24 tick motion (4 occasions 6 ticks) for the bar to reverse.

Let’s click on OK, and modify the chart, so we will see all of the bars.

Now we will see how a brand new bar begins when the value strikes 6 ticks in opposition to the earlier bar’s path.

In Abstract, ReversalFP charts are an effective way to see the market rotations and the way quantity is distributed in these areas. Every market has its personal rhythm, so you need to check completely different mixtures of field measurement and reversal settings to search out what works finest to your market and your buying and selling model.