Tick charts are a unique way to view market activity by plotting a new bar after a set number of trades, regardless of time. Tick chart scalping uses this faster, trade-driven data to capture quick, high-probability moves, giving traders an edge in fast-moving markets where timing is everything.

In this article, we explain how the tick chart scalping strategy works and how to apply it effectively across different asset classes.

What is a Tick Chart?

Unlike time-based charts (e.g., 1-minute or 5-minute charts), a tick chart plots a new candle every time a certain number of transactions (ticks) occur:

• For example: A 233-tick chart creates a new bar every 233 trades.

This means tick charts reflect market activity, not the passage of time, providing a much clearer view of real price action during active periods.

Why the Tick Chart Scalping Strategy Works

• Real Market Flow: Shows actual transaction activity rather than waiting for a time interval.
• Faster and More Accurate Signals: Ideal for quick entries and exits.
• Reduces Noise: Filters out minor price movements when the market is slow.

How to Set Up Tick Charts for Scalping

Here’s how to prepare:

1. Choose a fast tick chart setting:
   • Example: 89-tick, 144-tick, or 233-tick charts for forex and indices.
2. Add basic indicators:
   • 20 EMA (Exponential Moving Average) for trend confirmation.
   • MACD or RSI for momentum confirmation.

Choose your tick size based on the instrument’s volatility — more volatile markets require higher tick settings.

How to Trade the Tick Chart Scalping Strategy

Here’s a structured approach:

1. Entry Strategy

• Buy Setup:
  • Price is trending above the 20 EMA.
  • MACD is positive or RSI is above 50.
  • A bullish candle closes after a minor pullback towards the EMA.
• Sell Setup:
  • Price is trending below the 20 EMA.
  • MACD is negative or RSI is below 50.
  • A bearish candle closes after a minor pullback towards the EMA.

Fast, strong candle formations after a small retracement signal high-quality entries.

2. Stop-loss Placement

• For long trades, place your stop-loss just below the previous minor swing low.
• For short trades, place your stop-loss just above the previous minor swing high.

Because scalping relies on fast moves, tight stops are crucial.

3. Profit Target

• Aim for small quick gains — 5 to 15 points in indices, 5–10 pips in forex, depending on the asset.
• Alternatively, use trailing stops to capture more extended moves if momentum stays strong.

Quick reaction times are essential in tick chart scalping.

4. Risk Management

• Risk only 0.5% to 1% of your capital per trade.
• Frequent small profits compound over time, while tight stops limit damage.

Best Practices for Tick Chart Scalping

• Trade During High Activity: Focus on market open hours and key economic news releases for more frequent tick activity.
• Combine Tick Charts with Volume Indicators: High volume validates price movement strength.
• Use Tick Charts for Breakouts: Tick charts show clean breakouts from consolidation zones faster than time-based charts.

Breakout Scalping on Tick Charts

• Draw tight support and resistance levels during consolidation.
• Enter trades immediately on the breakout of these levels with volume confirmation.
• Scalping breakouts on tick charts often delivers rapid, profitable trades.

Common Mistakes to Avoid

• Overtrading: Stick to high-probability setups, not every price twitch.
• Using the Wrong Tick Size: Adjust your tick chart settings based on the instrument and trading session volatility.
• Ignoring Momentum Confirmation: Enter only when indicators and price action agree.

Advantages of the Tick Chart Scalping Strategy

• Sharper Entries: Better timing compared to traditional time-based charts.
• Faster Signals: Perfect for high-speed trading in active markets.
• Flexible Across Markets: Works in forex, futures, indices, and cryptocurrencies.

Conclusion

The tick chart scalping strategy provides traders with a dynamic and precise way to catch fast market moves based on real-time transaction flow. By combining tight setups, trend confirmation, and disciplined risk management, scalpers can consistently extract profits from the market’s natural rhythm.

To master advanced techniques like tick chart scalping and build a complete professional trading system, explore our expert Trading Courses designed to help you trade faster, smarter, and more profitably.