For scalping purposes, I feel both are useless. You need to be reading the actual DOM. I think a lot of people mistake looking at footprint charts and DOM reading are the same thing, but is really night and day.
The footprint chart only shows you what 'actually' traded, it doesn't give you an idea of the 'intent' of the market players.
I give you an example to help illustrate. Let's say you're trading the ES, all time favorite instrument. So the ES goes Boomzzzz, it moves up like 12 tics. And you're thinking to yourself "Man, I missed that run up and now I need to look for quick counter trend short scalp". So you look at your Order Flow Analytics, GOMzzzz Ladder, or Market Delta footprint charts (Or maybe you even have all 3 up!!!), and you're looking for a big ol' block of sell orders to hit that bid, but you wait..... and wait... and wait... and you see nothing.... And then the ES drops a quick 8 tics.... and You're sitting there and you're like... WTF!... how did I miss that?? how come I didn't see any sell side orders on my Footprints? There was selling, just that you couldn't see it clearly on the footprints. There was an iceberg order sitting at those .75s that kept refreshing itself as soon as buyers took it bid. What you saw on your footprint chart was a 2500 lot buy order @ .50 and a 5000 lot buy order @ .75 and your thought to yourself "man the buyers are going to take this higher, I better hold off" What you didn't see was 5000 lots trade @ .75 while the offer was no more than 200 at any one time. The intent of the players, someone was trying to unload a lot of size @ .75 while trying to entice buyers into thinking that the market was pushing higher, and get all the late comers on board.
After switching from footprint to DOM, I come to the realization that looking at Footprint is almost the same effect as looking at RSI (ZZZZZOMG)... I hope I didn't offend too many people here... But man, it's just all lagging data by the time you see it on the the footprints. Who cares about what happened 3 bars ago?
But wait, before you all start your personal attacks on me, I want to emphasize that I'm only talking from scalping perspective, since this is what the poster asked. Perhaps if you are using it for other purposes, like swing trading or long term investing, than yeah, I guess the footprints are useful.
Hope it helps.
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I'm not sure of the ES but with the CL I have finally found some context in the foot print chart. Delta, volume, points of control, commitment of traders, low value nodes, bid or offer clusters are all relevant.
Everyone evolves into different trading styles, but you have to use several building blocks start the "structured" learning process. Just like lawyers and doctors that are in "practices".
If anything the footprint may give hints of areas to avoid in scalping, like the chop of a new POC.
IMHO every trader should learn to scalp. Not saying it is the way to trade, but gives you the orderflow action of the workings of the auction. You should always do in sim, of course. But if you scalp train and you start out at a 30% win ratio and then after a period of time you are up to 45%,(still losing) the awareness of the market action is embedded in the peanut and more emotional capital is built. Also this forced learning with only a Volume ladder and Dom will bring so much more context to longer timeframe charts which you will be jonesing for.
And besides, most traders that scale out are in a way scalping for T1, which gives the monkey some breathing room and less wear and tear on the emotional capital.
There are so few good training videos for the volume ladder. I looked high and low, spent hours coming up with only tidbits. Had to do the grunt work to be able to see for myself.
Brett Steenburger said all traders need to find their niche. So true and many years in the search of it.
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I used to be a fan of stuff like cumulative delta and COT. But at the end of the day, my personal experience was they were just random noise.
My reasoning is, they are all based on some mathematical calculation with past price data, which is stale data.... which is basically an RSI. So if you're looking for divergences at double tops for example, I really question their validity. Plus it takes your focus of what really matters, the price action.
Even for market profile like value nodes, value area and all that. They are all just mathematical calculation. Very tough to really make I call on their effectiveness. The only thing I use market profile for is to see where the high volume nodes are and either not scalp in those areas (as the previous post mentioned) or look for a break out of the high volume area (in either direction). The only thing that seems valid in all this market profile jargon seems like it summed up in 1 statement "market tends to flow from high volume area to high volume area". Forget about using it to predict short term direction.... you need the DOM for that also.
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Yup. Pretty much like that. But I won't even go as far as labeling the so called high volume node (HVN) as a support or resistance level, that's all going back to that market profile jargon again. My entries are not at the HVNs, my entries are as it's moving out of them.
Basically the idea is to just scalp it when it's leaving a high volume cluster to another and traveling through the low volume area.
Last edited by KelvinKing; May 16th, 2015 at 12:55 PM.