Question on Tick Charts

Hey gang... I was not able to get to all of the questions from my webinar yesterday, so I will be answering them as time permits here on the blog. I had a number of question on "Tick charts."

Tick charts are different from time frame charts where each bar or point on the chart represents a certain period of time, such as 5 minutes or 1 day. Instead, they measure the number of trades and mark a point or create a bar for each time that number of trades or ticks has gone off. For instance, on a 100 tick chart it is representing 100 ticks for each bar or point made on the chart. Volume is not helpful on tick charts, but tick charts can even out the charts and show action more clearly than on a time frame chart. As such, I really love to use them as a primary means of charting on the index futures with the time frame charts as supplementary to show me volume activity and I use them to help with timing on stock charts.

One question was whether or not you can use tick charts in forex. Well, technically wouldn't they be called "pip" charts? hmmmm :) Actually, I've never heard of them used in forex. I would assume that you can, but it is going to depend on your charting platform. I don't think I've ever seen this form of charting offered on forex charts, but it doesn't mean they don't exist. As long as you can find them, then yes, they would work well for timing and you are likely to find them more useful than the regular time frame charts in that market.

Another question was whether or not my course (www.swingtrader.net) discusses how to read tick charts. The answer is yes, because everything other than volume is going to apply no matter what type of charting is used. My charts for the No Indicators portion of the course is primarily futures, so that is where you will see the most examples of this method.