What is a Tick Chart?

A tick chart is a type of financial chart that plots price movements based on a fixed number of trades (ticks) rather than time intervals. Unlike traditional time-based charts (e.g., 1-minute, 5-minute, or daily charts), tick charts generate a new bar after a set number of trades, offering a more detailed view of market activity and trade execution.

Tick charts are widely used in scalping and day trading, especially in high-frequency markets like forex, stocks, and futures.

How a Tick Chart Works

1. A new bar forms after a specific number of trades (e.g., 10, 50, 100, 1000 ticks).
2. Each bar reflects real market activity rather than fixed time intervals.
3. During high volatility, tick charts generate more bars as trading volume increases.
4. During low volatility, fewer trades occur, resulting in fewer bars.

For example, in a 100-tick chart:

• A new bar forms after 100 trades (ticks), regardless of the time it takes to complete those trades.
• If market activity is high, bars will form quickly.
• If trading volume slows down, bars will appear less frequently.

Why Traders Use Tick Charts

1. More Accurate Trade Timing

• Since tick charts adjust to real trading activity, they provide better entry and exit points compared to time-based charts.

2. Reduces Market Noise

• Time-based charts print bars at fixed intervals, even when there’s no meaningful price movement.
• Tick charts filter out low-activity periods, reducing unnecessary noise.

3. Enhances Scalping and Day Trading

• Tick charts allow traders to see market momentum more clearly, making them ideal for short-term trading strategies.

4. Captures Market Volatility

• More bars appear when volatility is high, providing more trading signals.

Tick Chart vs. Time-Based Chart

Feature	Tick Chart	Time-Based Chart
Bar Formation	Based on a set number of trades	Based on time intervals (e.g., 1 min, 5 min)
Market Noise	Filters out low-activity periods	Can generate bars even in slow markets
Volatility Reflection	More bars during high activity	Bars appear at regular time intervals
Best for	Scalping and active trading	Swing trading and long-term analysis

Choosing the Right Tick Chart Setting

Traders select different tick settings based on market conditions:

• 10–50 Tick Charts → Best for high-frequency trading (HFT) and ultra-short-term scalping.
• 100–500 Tick Charts → Ideal for day traders looking for momentum shifts.
• 1000+ Tick Charts → Suitable for longer intraday trends and filtering out noise.

FAQs

What is a tick chart?

A tick chart is a financial chart that creates a new bar after a set number of executed trades rather than at fixed time intervals.

How does a tick chart differ from a time-based chart?

Tick charts update after a specific number of trades, while time-based charts update at regular intervals regardless of trade volume.

Are tick charts better for day trading?

Yes, tick charts provide more accurate trade signals and filter out market noise, making them ideal for scalping and intraday trading.

How do I choose the right tick setting?

• Lower ticks (e.g., 10-50) for fast-moving markets and scalping.
• Higher ticks (e.g., 100-1000) for trend trading and filtering out noise.

Do tick charts work for forex trading?

Yes, tick charts are widely used in forex to track real-time trading activity and improve trade execution.

Why do tick charts generate more bars during high volatility?

Because tick charts form new bars based on the number of trades, increased volatility leads to more frequent tick completions.

Can I use indicators on tick charts?

Yes, common indicators like moving averages, RSI, Bollinger Bands, and MACD can be applied to tick charts.

Do tick charts show volume?

Yes, tick charts reflect trading activity, but volume-based charts provide better insights into actual share/contract size traded.

Are tick charts available on all trading platforms?

Tick charts are available on most advanced trading platforms like MetaTrader, NinjaTrader, and ThinkorSwim, but not all brokers offer them.

Is a tick chart good for swing trading?

No, tick charts are best for short-term trading. Swing traders generally prefer time-based charts (daily, weekly) for trend analysis.