Tick Charts Explained Simply and Understandably -- with David Moadel
welcome to looking at the markets with David Modell I want to talk about tick
charts and give you just a basic introduction to them so what is a tick
chart well conventional or time-based charts
like you've probably been using draw a new bar or candlestick after a set
period of time for example you might get a new candlestick or a new bar every one
minute or every two minutes every five minutes whatever you set it to where as
tick charts draw a new bar or candlestick after a certain number of
trades or transactions have been made in the market for example after every
thousand trades doesn't have to be a thousand it's whatever you set it to so
let's say you're using a three hundred and fifty ticks chart this means that
whenever three hundred and fifty trades come into the exchange a new bar or
candlestick will show whatever range the price moved during that period the
amount of time it takes will be different for each bar or candlestick
alright so you'll notice in the example here I know it's kind of small hopefully
you can see it but the candlesticks look pretty much the same they show the the
you know the high the low the the same stuff that a time-based or conventional
candlestick would show all right but there's a difference though it's got you
know the prices so it's pretty similar but don't be surprised if the times
shown at the bottom of the chart are not evenly spaced out notice that they're
right they're not perfectly spaced out like they would be in a time-based chart
because remember the amount of time that it takes to form candlesticks or bars
will vary alright so you might have to get used to that now tick charts are a
popular choice for day traders because they will often give you a quicker entry
into a breakout time based charts require you to wait for the close of a
bar or candlestick which could be much too late when trading breakouts
tick charts on the other hand can give you a much
earlier entry into a breakout because the bar or candlestick will often print
more quickly when trading activity Rises so that is in my opinion an advantage of
tick charts over the conventional time-based charts you might get if
there's a lot of activity a lot of trades or transactions you don't have to
wait for the you know the 5-minute candle to form okay you'll get the
candle forming or the bar whatever sooner if there are a lot of
transactions happening a lot of trades going on with that particular stock or
commodity or currency whatever it is on the exchange now tick charts are not to
be confused with the volume bars that you'll see at the bottom of people's
time based charts you've probably seen them before
just a regular candlestick chart at the bottom it'll have volume bars
sometimes as those volume bars typically don't tell you the price range the open
the high the low the close all that stuff all right
so volume bars are not the same as the the tick charts and if you're wondering
about brokers each brokers trading platform is different so feel free to
ask your broker if they offer tick charts and if they don't you might want
to request them you might want to say hey you know this is something that you
should offer alright so hopefully this was a good quick introduction to tick
tick charts and at least I hope I gave you enough information to decide whether
you want to continue pursuing or looking into using tick charts either instead of
time-based charts or how about you can use both okay you can have more than one
chart it's okay to do that to give you a different perspective alright so my name
is David Modell if you liked this video please give it a thumbs up on YouTube
and leave a comment letting me know what you think of tick charts do you like
them have you used them are you considering using them or maybe you
don't like them that's okay you can tell me that as well and again give it a
thumbs up if you liked this video and that encourages me to create more of
these videos and also please subscribe to my You Tube
if you haven't done it already so you can get updates whenever I put out new
videos like this one and if you want some help putting together a trading or
investing plan because you definitely want to have a plan otherwise you don't
know where you're going or how are you going to get there right then you can
email me at any time at David Modell at gmail.com alright thanks a lot I
appreciate it I'll talk to you again soon