Now that you understand what is meant by a tick chart, you probably want to learn how to get the most out of it. Here are three simple tips you can use to get more tick charts:
1: Watch for volume
Tick charts show a count of the total trade volume per tick. It is necessary to track this measure volume, because it shows you where the money is going. You may be tempted to simply follow the trend of the bar, but it is easy to fall traps in this way, if you don't need to attend to the volume of transactions below. Set your volume index for displaying volume of transactions and you can see amateurs trade activity from professional trading; amateurs will tend to trade in smaller volumes and professionals in the larger body. If you follow the peaks of voluminous indicating professional activity, you're day Ffor returns from their forecasts, Amateur negotiation is a less reliable indicator of future trends.
2: view detailed activity
With conventional charts based on the time periods when trading overstated is slower and less in volume. During these times of day, such as telephone and noon is lower volatility and professions are less frequent. Use tick charts, information for the trade is stretched and compressed so you can see trends, as if the transaction rate was stable during the day. This makes it easier to see the trends slow-paced after hours, and zoom the complex activity that occurs when the faster parts of the day.
This allows you to get on faster as newsbreaks breakouts. While, for example, a chart 3-minute will only update at regular intervals, a tick chart will show clearly and immediately if there is a sudden increase in commercial activity.
3: nothing is 100% Predictive
Although tick charts are a valuable tool in the Toolbox you inexpensive, be sure to take into account the other tools and techniques that you'll have at your disposal. Like any tool, tick charts are imperfect, predictors, and even with this type of assistance you occasionally bad distribution. It is not the end of the world when you either means that your tools are useless to you. Take the time to analyze what happened in your bad trade and add your stock knowledge.
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