Technical Analysis for Futures Traders
Companion Document

Visual and Diagram Concepts

This document describes every diagram referenced in the book in enough detail that an illustrator (human, or an AI image generator with strong instructions) can produce them without further consultation. Each entry includes: - Chapter reference and short ID. - Type (annotated chart, schematic, table-as-figure, time-series multi-panel, etc.). - Purpose, what the reader should learn from the diagram. - Composition, what is on the canvas. - Annotations, text labels, callouts, arrows. - Style notes, colour conventions, contrast, density.

A consistent visual language across the book makes the book legible. The conventions below should be applied uniformly.

0. Visual conventions

Adopted across all diagrams unless otherwise noted.

Colour palette

  • Up-impulse / bullish: soft green (#22A06B or similar), not bright lime.
  • Down-impulse / bearish: soft red (#E03E3E or similar), not bright crimson.
  • Neutral / context: medium grey (#6E7682).
  • Highlight / emphasis: amber (#E5A044) for callouts; deep blue (#1E5AA8) for institutional-bench reference (VWAP, AVWAP).
  • Liquidity flag colour: muted purple (#7B5EA7), used consistently for stop pools, equal-H/L flags, FVG fills.
  • Background: off-white (#FAFAFA) for print; dark mode (#1A1D24) for digital edition.

Typography

  • Sans-serif for chart annotations (Inter, Helvetica Neue).
  • Monospace for prices, numbers, indicator values.
  • Annotation labels left-aligned; price callouts right-aligned to the bar/level.

Chart structure

  • Time on x-axis, price on y-axis. Always.
  • Volume in subpane below price unless explicitly redundant for the diagram's purpose.
  • Indicator subpanes (CVD, ATR, BBW, etc.) below volume, each ~25% the height of the price pane.
  • Y-axis price labels on the right edge.

Density rule

A diagram should have one primary message. If there are more than 3 simultaneous things to look at, split into multiple panels. Reader cognitive bandwidth is the binding constraint.

Chapter 1: Foundations

D1.1: The four-contract grid

Type: 2×2 grid of annotated daily-bar charts. Purpose: Show the qualitative tape character of ES, NQ, GC, CL side by side. Composition: Each cell is a 60-day daily candle chart of the respective contract. All four panels use identical y-axis scaling normalised by ATR percentile (so visual amplitude is comparable across contracts of very different prices). Annotations: Cell title (contract symbol + name), tick value in dollars, recent 30-day average daily range in dollars, subtitle noting the dominant flow type ("equity index", "tech-heavy index", "metal/macro", "energy/news"). Style: Identical candle styling across panels; no panel-specific colours.

D1.2: Tick-value bar chart

Type: Horizontal bar chart with secondary axis. Purpose: Make explicit that ES and NQ have the same tick size in points but different dollar values. Composition: X-axis = dollar value per tick (primary, $0–$15). Each contract is a horizontal bar. Above each bar, a secondary indication of tick size in price units (0.25 pt for ES/NQ, $0.10 for GC, $0.01 for CL). Annotations: Direct labels at the end of each bar with the dollar value; annotation arrow connecting ES and NQ bars: "Same tick size, different dollar value." Style: Each contract its own muted colour; ES and NQ in similar hues to emphasise visual closeness.

D1.3: Roll spread schematic

Type: Two-panel time series (stacked vertical). Purpose: Show how a back-adjusted continuous chart hides the roll spread. Composition: Top panel: unadjusted continuous ES across a roll date, visible price gap on the roll date (e.g. ESZ5 settles at 5,170, ESH6 settles at 5,182, gap = 12 points). Bottom panel: back-adjusted continuous over the same window, gap eliminated, smooth chart. Annotations: Vertical dashed line at the roll date in both panels. In the top panel, an arrow labels the gap with "roll spread = 12 pts." In the bottom panel, a callout reads "all bars before roll shifted down by 12 pts; absolute prices distorted." Below the panels, a small footnote: "Use top for absolute-level work; bottom for trend/momentum work." Style: Top panel candles blue; bottom panel candles standard. The gap is highlighted in amber.

D1.4: RTH vs. ETH volume distribution

Type: 24-hour horizontal histogram (or rotated vertical bar chart). Purpose: Show where ES volume actually concentrates within a 24-hour cycle. Composition: X-axis is time of day (18:00 ET Sunday through 17:00 ET Friday, displayed as a single 24-hour cycle averaged across a recent month). Y-axis is average volume per 30-minute bucket. The RTH window (09:30–16:00 ET) is shaded in light green. Annotations: Three callouts at the volume-spike times: Asia open (~19:00 ET), EU open (~03:00 ET), US data-release windows (~08:30 ET). Headline above the chart: "65–75% of ES volume prints during RTH. The remaining 25–35% is spread across 16+ hours." Style: Histogram bars in soft grey; RTH shaded region in soft green; spike-time callouts in amber.

D1.5: Leverage and ruin curve

Type: Mathematical curve plot. Purpose: Make the asymmetry of compounding losses visceral. Composition: X-axis = drawdown percentage (0% to 90%). Y-axis = recovery percentage required to break even = (1 / (1 − dd)) − 1. Single curve with key points annotated: 10% dd → 11.1% recovery; 25% dd → 33.3%; 50% dd → 100%; 75% dd → 300%; 90% dd → 900%. Annotations: A dashed horizontal line at "100% recovery" intersects the curve at "50% drawdown", this is the moment where recovery becomes harder than the loss. Vertical highlight band at 50% drawdown labelled "the gravity well." Below the chart: "Why prop desks cap daily losses at 2–3% of equity." Style: Single dark curve on light background; the highlight band in muted red.

Chapter 2: Market Structure

D2.1: Swing structure annotated chart

Type: Two-panel comparison (vertical stack). Purpose: Demonstrate that ATR-conditioned ZigZag produces meaningfully fewer, more-meaningful swings than a naive N=3 pivot rule. Composition: Same 5-min ES chart in both panels (a recent RTH session). Top panel: Naive N=3 pivots, every local extreme labelled with a small dot and "HH"/"LL"/"HL"/"LH". Visibly noisy; multiple labels per ten bars. Bottom panel: ATR-conditioned ZigZag (k=1.5, ATR period 14), far fewer labelled pivots, each clearly meaningful. BoS and CHoCH events labelled where they occur. Annotations: A side panel counts: "Top: 47 pivot labels in 78 bars. Bottom: 9 pivot labels, 1 BoS, 1 CHoCH." Title: "Same chart, different formalisation. The ATR-conditioned pivots are what desks track." Style: Pivot dots in muted colours (HH/HL green; LL/LH red). BoS in amber, CHoCH in blue.

D2.2: Regime quadrant

Type: 2×2 + center cell schematic. Purpose: A playbook-selection map. Composition: A 2×2 grid: rows = directionality (Trend / Range), columns = volatility (Calm / Vol). A fifth cell ("Squeeze") sits in the center. Each cell contains: - The label (e.g. "Trend-Vol"). - A miniature representative chart sketch (a sloped line with wide bars for Trend-Vol, a horizontal range for Range-Calm, a flat compressed band for Squeeze, etc.). - Two-line "Playbook" and "Anti-Playbook" entries. Annotations: Below the grid, a short legend mapping the composite-score thresholds to each cell. Style: Each cell with a soft-coloured background tinted by regime "intensity": Trend-Vol = warm orange tint; Range-Calm = cool blue tint; Squeeze = neutral grey. Sketches in dark line on the tinted background.

D2.3: Composite component traces

Type: Four-pane time-series subplot. Purpose: Show how the four composite components co-move and disagree across a real trading week. Composition: X-axis = time, spanning 5 trading days. Y-axes (one per pane): ATR percentile (0–100), BBW percentile (0–100), KER (0–1), ADX (0–60). Across the top of the figure, a colour-coded ribbon labels the regime classification at each timestep. Annotations: Two key moments highlighted with vertical dashed lines: (1) a Squeeze → Trend-Vol transition (BBW spikes; KER lags by 5 bars; ATR percentile climbs over 10 bars), (2) a Trend-Vol → Range-Calm transition (KER drops first; ATR percentile catches up). Style: Each pane in its own muted colour; the regime ribbon at the top uses the regime quadrant's colour mapping.

D2.4: Regime transition signatures

Type: Three-panel small-multiples (horizontal). Purpose: Train the eye to recognise three canonical transition patterns. Composition: Three small charts in a row, each showing 30 bars of price action with the relevant indicator subpane. - Panel A: Range → Trend. Failed range fade (long entry rejected at top, then top breaks). KER sub-pane shows KER rising from 0.2 to 0.5 over the breakout. - Panel B: Trend → Range. CHoCH event with a clear lower-high after a BoS. KER drops from 0.7 to 0.3. - Panel C: Squeeze → Vol expansion. BBW compressed for 15 bars, then a single-bar breakout outside the bands. BBW spikes from 15th to 75th percentile in 3 bars. Annotations: Each panel titled; arrows pointing to the pre-signal bar (the bar before the transition) and the confirmation bar. Style: Identical scale and styling across panels.

D2.5: Crisis volatility comparison

Type: Two-panel comparison (side-by-side). Purpose: Make crisis volatility visually distinguishable from "high" volatility. Composition: Left panel: A normal Trend-Vol session (recent ES day with composite Trend-Vol). Right panel: A crisis-volatility session (e.g. Aug 5 2024 NQ). Both panels at identical price-axis scaling. Each panel includes price (top), volume (middle), and ATR (bottom). Annotations: Above each panel: ATR value, ATR percentile, daily range in points, daily range in dollars. Highlighted text on the right panel: "ATR 4× trailing median; spreads 5–8× normal; correlations across markets converged." Style: Left panel uses normal colour palette; right panel uses a muted, "alarmed" tint (slightly desaturated red wash on background).

Chapter 3: Liquidity and Order Flow

D3.1: Anatomy of a liquidity pool

Type: Schematic chart with hidden-stop visualisation. Purpose: Make explicit that liquidity is above the level (in the form of stops), not at the level itself. Composition: A 30-bar synthetic chart with two equal highs at the same price level (6,212). Above the level, a translucent purple bar represents the "stop pool", labelled as "approximately X contracts of stops, scattered across 1–5 ticks above the level." The chart shows price approaching the level from below. Annotations: Labels for each equal high (1st-touch, 2nd-touch). Label for the stop pool. Arrow from below pointing up: "what aggressive buyers see, stops to harvest." Arrow from above pointing into the pool: "what aggressive sellers will fade, once stops are exhausted." Style: Stop pool in muted purple, partially transparent. Equal high markers in muted purple. Body bars in standard up/down colour.

D3.2: FVG annotated

Type: 5-bar chart segment with a later retest panel. Purpose: Define the FVG visually and show a typical retest. Composition: First 3 bars are an up-impulse: bar 1 high < bar 3 low. The vertical price band between bar 1's high and bar 3's low is shaded amber and labelled "FVG (fair-value gap)." The chart then continues with bars 4–20+ showing price advancing, then retracing back to the FVG zone, touching the proximal edge (the upper boundary of the FVG, since this is an up-impulse), and resuming up. Annotations: "Bar 1 high" and "bar 3 low" with horizontal lines at each. The FVG label inside the shaded band. Arrow on the retest bar: "proximal-edge retest, typical fill behaviour, partial not full." Headline: "FVGs in liquid futures retest at high frequency in directional impulses, conditional on RTH and ≥ 1.0 × ATR impulse strength." Style: Up-impulse bars in standard green; FVG shading amber; retest bar highlighted in blue.

D3.3: The sweep mechanic, three panels

Type: Three-panel sequence (horizontal). Purpose: Walk through the canonical sweep-and-reverse pattern. Composition: - Panel A, Approach. Price approaches an equal-high level from below. The chart shows the level, the approach bars, and the rest of the structure (IB high, AVWAP). No sweep yet. - Panel B, Pierce with cascade. A single bar pierces the level by ~0.20 × ATR. The volume bar is ~3× trailing average. A footprint sub-panel below the price chart shows stacked-ask imbalances (annotated). - Panel C, Rejection with absorption. The next bar closes back inside the level. The footprint shows stacked-bid imbalances on this bar. CVD subpanel shows the divergence: price made a new high (the wick), but CVD made a lower high. Annotations: Each panel titled (Approach / Pierce / Rejection). On Panel C, an arrow on the entry: "structurally: short trigger here." Risk and reward boxes annotated on Panel C: stop above the wick, target at IB midpoint. Style: Footprint sub-panel in monospaced cells with bid_volume × ask_volume labels. CVD line in thick blue.

D3.4: Footprint cell anatomy

Type: Close-up zoomed view of a single bar rendered as a footprint. Purpose: Define footprint cells and label the three patterns to recognise. Composition: A single vertical column representing one bar's footprint. The column is divided into ~15 horizontal cells, one per price level. Each cell shows [bid_vol × ask_vol] (e.g. "12 × 87"). The bar's high and low are labelled at the top and bottom of the column. To the right of the column, three callouts highlight three patterns: - Pattern A, Stacked imbalance (ask-side): three consecutive cells where ask_vol / bid_vol > 3. - Pattern B, Absorption: a cell with very high bid_vol but the next-up cell prints normally, "the bid was hit hard, and yet the price did not break down." - Pattern C, Balanced cell: ask_vol ≈ bid_vol; no information. Annotations: Each callout points to the exemplar cells and gives the diagnostic ratio. Below the column: "Footprint depth at structure is high-information; at random mid-range, low." Style: Cells colour-coded by imbalance direction (green for ask-dominant, red for bid-dominant, neutral grey for balanced). Imbalance ratio threshold (e.g. 3:1) noted in legend.

D3.5: CVD divergence at PDH

Type: Two-pane vertical chart (price top, CVD bottom). Purpose: Define CVD divergence at structure visually. Composition: Top pane shows price action approaching and slightly piercing PDH; the swing high at PDH is labelled. Bottom pane shows CVD: the prior swing high was higher in CVD than the current swing high. A diagonal line on the price pane connects the prior and current swing highs (showing higher prices); a diagonal line on the CVD pane connects the corresponding CVD points (showing lower CVD). The two lines together visually express the divergence. Annotations: Both swing highs labelled. The divergence-creating diagonal lines highlighted in amber. Below the bottom pane: "Divergences at structure are conditioning information. Divergences at random points are not." Style: Standard candle chart on top; CVD as a thick navy line on the bottom.

D3.6: The conditioning rule, visualised

Type: 2×2 truth table diagram. Purpose: Make explicit which combinations of (structure, order-flow confirmation) produce actionable trades. Composition: A 2×2 grid: - Rows: "At structure" / "Not at structure." - Columns: "Order flow confirms" / "Order flow disagrees or absent." Cells: - (At structure, OF confirms) = "ACTIONABLE", bright background. - (At structure, OF absent) = "WATCH", muted background. - (Not at structure, OF confirms) = "WATCH at most", muted background. - (Not at structure, OF absent) = "NOISE", grey background. Annotations: A short caption at the bottom: "Only the top-left cell warrants a trigger. The book's rule, condensed." Style: Bright cell in soft green; watches in soft amber; noise cell in dim grey.

Cross-cutting diagrams

D-X1: The integrated stack (book-level overview)

Type: Layered hierarchy diagram. Purpose: Show the institutional stack we recommend, top-of-mind to deepest-layer. Composition: A vertical stack of 10 layers, each a horizontal bar: 1. Session-aware reference levels. 2. Volume Profile / naked POCs. 3. Anchored VWAP family. 4. Liquidity flags (equal H/L, FVG). 5. Order flow confirmation (CVD, footprint, absorption). 6. Regime composite (ATR%, BBW%, KER, ADX). 7. Open-type classifier. 8. Cross-asset context. 9. Mechanical risk constraints. 10. Trade journal & statistical review. Each layer is visually wider than the one above it, conveying that each layer rests on the ones above. Annotations: Each layer briefly labelled with its purpose. A side caption: "Information value flows top-down. Each layer adds incremental edge only conditional on the layers above." Style: Layers in graduated muted blues from top (lightest) to bottom (deepest).

D-X2: Regime → playbook map

Type: Sankey-like flow diagram. Purpose: Show how regime classifications feed into framework selection. Composition: Left side: five regime nodes (Trend-Vol, Trend-Calm, Range-Vol, Range-Calm, Squeeze). Right side: framework nodes (Framework 2, Trend Continuation, Framework 3, Range Fade, Framework 4, Squeeze Breakout, "Skip / Reduce Size"). Flows connect each regime to its allowed framework(s) with weighted-line widths (where line width = recommended position-size fraction). Annotations: A "skip" arrow from "Transitional regime" → "Skip the session." A subtitle: "The map is not exhaustive, it is the defensible default. Personal edges sit on top." Style: Regime nodes in their quadrant colours (matching D2.2). Framework nodes in dark grey. Flows in graduated blue.

D-X3: Daily plan timeline

Type: Horizontal Gantt-style diagram. Purpose: Show the operational rhythm of the daily plan (Framework 8). Composition: A horizontal time axis from 07:00 ET to 16:00 ET, with five bands stacked vertically: - Pre-market (07:00–09:30): pre-market routine, watch-level marking. - Open (09:30–10:30): open-type classification, regime estimate. - Trade window (10:30–14:30): primary framework execution. - News blackout overlays: short red bands at scheduled news event times. - Pre-close (14:30–16:00): scaling out, journaling. Annotations: Each band labelled with its primary task. Vertical dashed lines at: 09:30 (open), 10:30 (IB completion), 14:30 (pre-close). Style: Each band a different muted colour. News blackout bands in red.

D-X4: Trade plan template, as a card

Type: Form-style card visual. Purpose: Make the trade plan template concrete. Composition: A rectangular card with 8 fields, each on its own line: Setup, Regime, Level, OF Confirmation, Entry, Stop, Targets, Size. Below, a footer: "If any field is blank, the trade is not ready." Style: Clean form layout with light grid. Field labels left-aligned bold; field values right-aligned plain. Card border in the institutional-blue accent.

D-X5: Per-trade risk sizing nomogram

Type: Multi-line plot. Purpose: Visualize the contracts-vs-stop-distance relationship for a fixed risk budget. Composition: X-axis = stop distance in ticks (4 to 50). Y-axis = number of contracts. One line per contract symbol (ES, NQ, GC, CL), each line showing how many contracts fit within a $500 risk budget at each stop distance. The lines are step-curves (since contract counts are integer). Annotations: Endpoints labelled with contract counts at 8-tick and 25-tick stops. Headline: "$500 risk budget; contract sizing decreases as stop widens. Sizing is a function of stop distance, not of conviction." Style: One line per contract in muted distinct colours. Step-style line, not smooth.

Late-chapter diagrams (outlined for future drafting passes)

The following diagrams are referenced in the outline of later chapters and should be drafted when those chapters are written. The list serves as the design budget.

ID Chapter Description
D9.1 Ch 9, Volume Profile TPO construction step-by-step (5 sub-panels showing how the profile builds bar-by-bar)
D9.2 Ch 9 Day-type taxonomy: 6 small-multiples, one per Dalton day type
D9.3 Ch 9 Naked POC retest empirical histogram (time-to-retest distribution from sample data)
D10.1 Ch 10, VWAP / AVWAP Session VWAP with σ-bands; band-touch behaviour annotated
D10.2 Ch 10 Multi-AVWAP confluence: session AVWAP, week AVWAP, prior-settlement AVWAP intersecting at a single price
D11.1 Ch 11, Order Flow Stacked imbalance pattern at PDH with full footprint and CVD
D11.2 Ch 11 Absorption signature at structure with delta divergence within bar
D12.1 Ch 12, Liquidity Sweep variants: equal-high, PDH, naked POC, IB-extension, small-multiples
D12.2 Ch 12 FVG retest empirical distribution by impulse strength
D13.1 Ch 13, Open / IB Open type classifier flowchart
D13.2 Ch 13 IB extension probability table by open type
D14.1 Ch 14, Cross-Asset Cross-asset dashboard mockup (VIX, DXY, US10Y, ES-NQ correl)
D17.1 Ch 17, Risk Drawdown-vs-recovery curve (re-use of D1.5 with finer detail)
D17.2 Ch 17 Kelly sizing curve and the fractional-Kelly safety bands
D18.1 Ch 18, Execution Slippage as a function of order size, by contract, intraday vs. overnight
D19.1 Ch 19, Failure Modes Crisis-volatility case studies, three panels (Feb 2018, March 2020, Aug 2024)
D20.1–D20.4 Ch 20, Worked Examples Full-session annotated charts for each of the four worked examples
D21.1 Ch 21, Daily Plan Operational checklist as a printable page

Notes for the illustrator

  • Real charts beat synthetic ones for credibility. Where possible, source actual price action from the dates referenced and annotate them, rather than producing schematic illustrations.
  • Annotations should be readable at print size. Aim for 8pt minimum on annotations at the figure's printed size; assume printed figures are ~5 inches wide.
  • Avoid 3D effects, gradients, drop shadows. Cleanliness scales; decoration does not.
  • Consistency is more important than aesthetic refinement. A reader should learn the visual language once and re-use it throughout the book.
  • Each diagram earns its space. If a diagram is not adding information beyond what the text says, drop it.

Production-readiness summary

Status Diagrams
Fully specified, ready for illustration D1.1–D1.5, D2.1–D2.5, D3.1–D3.6, D-X1–D-X5
Outlined; full spec in respective chapter draft D9.1–D21.1
Total diagrams in book ~40

The 16 chapter-1-through-3 diagrams plus the 5 cross-cutting diagrams (21 total) cover the foundational visual vocabulary of the book. The remaining ~20 are late-chapter and will be specified as those chapters are drafted.