A post I saw on Reddit..

Order Types in Footprint
Hi friends,

This post is mainly to confirm my understanding, 
but maybe it's also helpful for others.

In the footprint chart you see bid and ask. 
Both are only market orders

So a market order on the bid side can be:

1. Someone go short 
2. Someone is long and a stop loss is triggered 
3. Someone is long and a take profit is triggered

A market order on the ask side can be:

Someone go long

Someone is short and a stop loss is triggered

Someone is short and a take profit is triggered

So for Delta it means:

High positive delta:

Aggressive long buyers dominate

Many stop losses for shorts are triggered

Many take profits from short sellers

High negative delta:

Aggressive short buyers dominate

Many stop losses from longs are triggered

Many take profits from long buyers

Is here something I oversee or is this correct

Here are my thoughts

There's some good thought processes going on here by just trying to organize what is happening to various participants in the market and how that could be displayed on the footprint.

If I may make a suggestion. These nuances are fine and dandy, however, if you take that to a real time execution mode and think "ok, buyers getting stopped out here, sellers hitting the tape, BOOM go short" , you will build narratives based on what you think is happening with market participants when you have no idea what their intentions are.

So I may present you with a different thought process. We know that for a transaction to occur, there has to be limit orders (liquidity) and there has to be someone willing (or needing) to cross the bid/ask spread, for the sake of simplicity lets call them market orders or orders that are hitting the bid or lifting the offer.

Do we really care what the intentions of these participants are? What if we actually could know ABC trader was getting aggressively short, what if he's a terrible trader? Ok, what if its (name institutional trade desk) if you know they are getting short, do you know their strategy, or price sensitivity, is it hedged with other pair trades? What if they are also wrong and the market just grinds higher?

Hopefully my point is coming across that it doesn't actually matter what any of the participants intentions are at any given point. What really matters is how the market is

reacting

to the activity you see. If 1000 lots are lifted at high of day we think "oh my, there's a huger buyer here, I'm gonna get long for momentum" then the market rotates back down and stops you out. What happened?

What you should be asking yourself are what are the patterns on the footprint that I should be looking for that will give me a tradeable setup. For example in the same context of 1000 lots lifted at the high of day, maybe I've seen that before and wait to see what happens if that area is retested, is there more positive delta with little to no price movement? Ok there's a clue, no we have some context that there's decent buy pressure (who cares why) but the market isn't moving in that direction, so the trade idea here could be a short. That's just one example, but if you study this daily you can find incredible opportunities just using a delta footprint chart and understanding how these patterns play out. Yet none of this requires you to build some narrative of "who's doing what".

Hope this helps!