Whilst generic candlestick based charts may show when the price changed previously, the TradingLite Heatmap may often show crucially, where and why the price may change into the future.
Although it is not recommended to base your trading methodology solely upon the information available via the TradingLite Heatmap, it can often provide a solid foundation with which to accompany or confirm, other forms of technical analysis.
The greater the time spent analysing Heatmap data, the often subtle and nuanced behaviours of order-flow within the Order Book may be revealed, and as a result, further your understanding of the intricate characteristics of each market.
As briefly explained in our Quick Start Guide and Heatmap Basics guide, the TradingLite Heatmap is a visual representation of the limit orders within the pair’s Order Book. This is updated in real-time for the current candlestick.
At the end of the candle’s life, a colour sensitive ‘snapshot’ of the Order Book is recorded. These ‘snapshots’ are then shown for each previous candle that is within view on your chart. Collectively, these previous ‘snapshots’ create an overlaid visualisation of Heatmap, enhancing the traditional price chart.
Given that all orders within the Order Book are limit orders, the TradingLite Heatmap can also be considered as a historical record/visualisation of liquidity changes, which could be incorporated within your trading approach.
Heatmap blocks above the current price show Limit Sell orders, whilst blocks beneath the current price show Limit Buy orders.
The colour of each block within the TradingLite Heatmap is assigned based upon the total value of orders at that particular price point.
NEW: Dynamic Heatmap Algorithm
Previously, TradingLite’s original SD and HD Heatmap block sizes were predetermined. Then… 2021 started and activated full bull 🐂 mode. This meant that liquidity was spread over a greater range of prices. The result was, that these predetermined Heatmap block sizes were disproportionately too small, causing large increases in data consumption and consequently your browser’s system resources. Notable examples included DOGE.
Therefore we had to re-think our approach to ensure that the TradingLite Heatmap block sizes were always suitable, regardless of volatility and subsequent liquidity conditions, and most importantly; without manual intervention.
This major update now implements a dynamic and adaptive Heatmap algorithm, which will automatically adjust Heatmap block sizes accordingly. This will ensure maximal efficiency of system resource use, providing the very best possible user experience. Rest assured however, the adjustments will only take place during a sustained, extreme change in volatility. This will be reflected on the 1st of each month.
Heatmap Block Values
As an alternative to a persistent zoomed appearance of the Heatmap, in order to view liquidity values as shown above, you also have the TradingLite Heatmap Lens.
This handy waits until your crosshair becomes stationary to provide a mini zoomed windows of the Heatmap values.
By holding the shift key, you will fix the cursor either horizontally or vertically, allowing precise navigation of the Heatmap values.
To fully appreciate the TradingLite Heatmap, and to ensure it is providing you with the greatest utility possible for your analysis, configuration of the various Heatmap settings is crucial:
The intensity scales allow a greater degree of granularity/sensitivity in the visualisation of the Heatmap.
- The first scale (left) allows you to quickly select the minimum unit value of the Heatmap. This will remove low value orders from the Heatmap data.
- The second scale (right) allows you to quickly select a maximum percentage of the peak unit value.
HD/SD Heatmap Block Size
Selection between HD and SD individual block size of the Heatmap.
The dropdown will provide the HD/SD parameters set for each pair (shown below). The primary benefit of a lower block size/incremental value (HD) being selected, is that the Heatmap will provide the location of limit orders/liquidity within the Order Book with 5 x greater accuracy than the standard SD option.
(Note: HD/SD Selection is only available on Gold subscription plans.)
The dropdown, which accompanies the sliders, allows the ability to finely tune the minimum and peak unit values.
This dropdown also displays the pair’s contract details. This includes the value of one unit, in addition to the HD/SD Heatmap block size.
The Heatmap can be Extended which can be used will help identify the current supply/demand liquidity pools, with greater clarity.
To extend the Heatmap:
- Click Indicators
- Select ‘Heatmap’
- Select the desired value from ‘Extend Heatmap’
By selecting a custom theme for the Heatmap (Layer Settings > Customize Theme), you have the ability to select from a variety of different colour styles, to aid in your graphical interpretation of the chart.
New: Dual Gradients
Now you can specify two alternate gradients for the heatmap, separated by price. Pictured below is ‘Hellfire’ & ‘Lucky Day’.
To activate dual gradients for your heatmap, navigate to ‘Chart Settings’ > ‘Theme’ > ‘Advanced Theme Customisations’
Quickly show/hide the TradingLite Heatmap by pressing the ‘H’ key on your keyboard.
Heatmap Lens Shortcut
Quickly show/hide the TradingLite Heatmap Lens by pressing the ‘L’ key on your keyboard.
Press ‘K’ to show the list of shortcuts.