In order to make smart in-the-moment trading decisions, you have to take a lot of information into account very quickly. There is the overall trend, the short term and intermediate term trends, there is volume, liquidity, spread, risk control, and so much more. Traders are inundated with information and often have a hard time cutting through the noise. Raindrop Charts are designed to help by visualizing the movement of price, volume and sentiment - at the same time - using a new type of calculated illustration that focuses on highlighting where the action (volume) was.
Unlike traditional candlesticks, Raindrops do not have open or close prices. They are constructed from a high, low, left VWAP and right VWAP. The first half (left side) of each Raindrop represents the first half of the trading period, the second half (right) represents the second half. The width of each side represents the amount of trading volume that occurred at each price level. The dashes are the VWAP for the respective period.
Download the white paper for details on how Raindrops are constructed.
Explore the Blue Doji Raindrop in this blog post.
See how traditional candlestick, bar, Heiken Ashi and line charts change when viewed through a Raindrop Chart. Just drag the control circle side-to-side. The Raindrop chart will always be on the right.
Raindrop Charts are a standard feature of the TrendSpider platform. To try them out, just sign up for a free trial using the link below. You may also download the white paper, or join a demonstration webinar to see them in action.