Tick Charts are not very well known and can be confusing. Can you please point me to a good source of information with a decent explanation? Tick charts draw a new bar after a set number of trades , for example after every 1, trades. It measures the number of stock issues trading on an up tick versus a down tick. The Emini is a perfect trading vehicle because we know the number of contracts in each individual trade. So on a tick chart when we plot volume we see the total number of contracts traded during those last say trades.
The relative size of the volume histogram shows us the average trade size. If during the last trades the average number of contracts in each individual trade was 2, the volume histogram would show a value of However, if during the last trades the average number of contracts in each individual trade was 25, then the volume histogram would show a value of 2, So if the volume histogram is low we are seeing Amateurs trading and if the volume histogram is high we are seeing Professionals.
The 2, tick chart above has some of the high value bars highlighted — these show large average trade sizes or Professionals. As you can see, you want to follow the Professionals. They were buying the dips and shorting the rallies. Similarly, looking out for low value bars allows you to identify what the Amateurs are doing. The 2, tick chart above is exactly the same as the previous chart but with some of the low value bars highlighted. These show small average trade sizes or Amateurs.
As you can see, you want to fade i. They were shorting the dips and buying late into the rallies. With say a 3 minute chart the entry on close would have got you in closer to — or 5 points worse off! I would be profitable for 2 months and then boom, volatility spikes up and all of sudden, my trading is not good. Switching to tick and tick has completely masked the volatility differences and allows me to trade more consistently regardless of the volatility.
In the example above, the Better Sine Wave , my preferred cycle analysis tool, was able to pick out a Pull Back long entry point in the 2, tick chart. However, with the 3 minute chart the Pull Back was completely missed. Lastly, a tick chart compresses low activity periods, like lunch time and after-hours. Or fewer false break-out trades during lunch time. You can read more about the CME and tick chart changes here. The CME introduced a new data feed protocol in December and all data feed providers have to implement it by October You can read more about the details in this forum thread and this blog post.
The result is that the average Emini trade size has increased by a factor of approx. All the data providers, except eSignal, seem to have adopted un-bundled data and there appears to be almost no difference between pre- and post-MDP 3. The average trade size is virtually identical and Better Pro Am continues to identify Professional and Amateur activity. If you are an eSignal user, we recommend using a tick bar chart instead of a tick bar chart, etc.
The bundling of data appears to add a factor of 2. So on a tick chart when we plot volume there is no trade volume size. However, there is another option — futures Forex contracts traded on the CME. These contracts have grown quickly and are now large enough that they are representative of what happens in the cash Forex market. The advantage of these futures contracts is that complete volume data is available and tick charts work great.
No two tick data feeds are the same. The data from the exchange is time-stamped and your charting platform uses this to draw the bar. However, with a tick chart, new bars are drawn based on the number of trades that have been completed — and this trade count can be:.
Frustrating — I know. However, for me the advantages of a tick chart far outweigh these negatives. For example, volume histograms that are all the same height.
This is easily fixed. Now the volume indicator on your tick chart will reference the trade volume data instead of the tick count data. If your tick charts are slow to load, your symbol data cache might have been corrupted or become bloated. The solution is to re-build your cache — I do this every 2 to 3 weeks or as soon as I notice my tick charts are slow to load. The steps for re-building your cache are explained in Tip 2 here.
IB provides snap shots of the trade data several times a second with an aggregate of the trades that took place during that interval. As a result time-based charts e. Emini futures are probably the best day trading vehicle in the world today and the 'Better' indicators are a very unique set of 3 non-correlated indicators that will give you a substantial edge day trading Join 9, traders who follow Emini-Watch.
Input your email address below to get Emini trading updates by email:. Update December — MDP 3. Otherwise, no changes are required to tick chart settings. Latest video from Emini-Watch. Thursday 9 November Latest video from Emini-Watch.More...