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What is Tick Chart

What is Tick Chart

A tick chart is a representation model used in stock market analysis. It stands out for not taking into account the time factor.

By means of a tick chart it is possible to measure price variations of all kinds of financial assets .

Its basic figure is the so-call tik, a graphic representation of the minimum increases or decreases experienc by a given value over time.

This happens because the chart shows a tick for every match between supply and demand for a certain asset.

With the passage of time, more and more stock market traders or operators work with this resource instead of traditional time -type charts .

How the Tick Chart Works

These types of charts are widely use when analyzing the prices of financial assets at any given time or within a certain period of time.

These changes are motivat by the securities transactions that take place in the markets. Thus, by means of ticks it is possible to visually show these operations and their effect on the corresponding price.

Such representation is often made to scale, each tick representing, for example, a dispos amount.

In other words, it translates purchases and sales made  records their agreed price (this is how the price reached is mark)

For this reason, professionals in the arena of investment resort to its daily use over other alternatives for different reasons.

Main Features of the tick Chart

As a measurement and graphic representation model, a tick chart has a series of features to take into consideration:

  • Activity priority. This measurement element does not take into account periods in which no transactions are made in a particular instrument .
  • Tick ​​volume. This graph will be complet as the activity progresses. Thus, the greater the number of operations in the market that we observe, the more tiks will be display.
  • Decimal measurement. The values ​​displayed by the tick chart are represent in decimal form.
  • economic nature. The graph represents prices of each particular value, transferring different amounts of an economic nature. That is, it uses monetary units .
  • Trend reading. The fact of observing stock market movements without taking into account the temporary variable helps to locate trend breaks more easily.
  • Complementary use. This kind of plan is often us in conjunction with other investment alternative  tools . The reason is to improve the trader’s analysis capacity and show a broader vision of the investment reality.

The time chart is the most popular alternative to the tick chart, and the most common example is the intraday layout.

These models allow evolutions to  observed in terms of hours or significant periods of time.


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