If you are already somewhat familiar with cryptocurrency and trading, then you have most likely heard of the term footprint. It is one of the tools that helps traders understand what is happening in the market in real time. But what exactly does it show, how does it work and why is it worth paying attention to?
Let's go...
Footprint (or footprint chart) is a way to display price movements and trade volume on charts in real time. It shows where large orders have been placed, how robots are behaving, and what trends are currently forming.
It sounds a bit complicated, but it is actually a very useful tool that helps you make more informed trading decisions.
Footprint charts display price, volume, and other important parameters of transactions. Typically, on such charts you see the price on the vertical axis, and the number of transactions (volume) on the horizontal axis. This data shows not just the price, but the exact number of coins that were bought or sold at this price.
Price Level: This is the price at which the transactions took place.
Volume: How many coins were bought or sold at this level.
Large Orders: Often large orders placed in the market can be seen as large "volumes". This is an important signal for the trader.
Why use Footprint?
Footprint helps you see what's happening in the market in more detail. It shows you not just the price, but the actual volume of trades, and lets you see where and when large orders were placed. This can help you determine whether prices will rise or fall.
Understanding the activity of large traders and robots. Large orders or trading bot activity often predict possible changes in the market.
Better order setup. When you see where big orders appear on the chart, it helps you understand where to place your orders - for example, stop loss or take profit.
Increased accuracy. This helps to avoid "noisy" movements and make decisions based on real data.
Why is this important??? In my opinion, there are a number of reasons for this😏
Tracking the Big Players. Big traders often move the market. Using Footprint, you can follow their actions.
Market Trend Hint: Footprint helps predict where the price might go based on activity at different levels.
Precise trades: Instead of following the trend at random, you can see where the key resistance and support levels are.
This tool is available on some trading platforms and terminals that I wrote about earlier, such as TradingView or Sierra Chart. Many professional traders actively use it for precise entries and exits from trades.
Footprint is one of the most accurate tools for tracking price action and volumes. It allows traders to understand where large orders are placed and how robots are behaving, which can help predict future market behavior.
It may be a bit overwhelming for beginners to grasp all the details at once, but if you want to improve your trading strategies, it is worth a try. Footprint is like a "scanner" for the market: it helps you see hidden signals and make more informed decisions.
If you are serious about trading, add this tool to your arsenal and it may just help you take a step forward.
#Traiding #Binance #currency $XRP