I know that it represents the amount of times a price has changed. But what’s a change? If the price moves 1 pip is that 1 tick?
If the price jumps up 3 pips, is that 1 tick? etc
Thanks!
I know that it represents the amount of times a price has changed. But what’s a change? If the price moves 1 pip is that 1 tick?
If the price jumps up 3 pips, is that 1 tick? etc
Thanks!
Please excuse my mentioning that it’s one of these questions that’s slightly tricky to answer, because it appears that the person asking it is starting off from a position of “knowing” something that “ain’t quite right”!
They’re two different things.
Tick charts display the price with the bar duration being defined not by the passage of any specified period of time but by the occurrence of a specified [U]number of transactions[/U] ([I]with or without[/I] price changes, and regardless of the volume of each) that have occured.
Volume charts display the price with the bar duration being defined not by any of the above but by the passage of a specified total [U]transaction-volume[/U] having occurred (again with or without price changes and without reference to time: if the addition of a single, large transaction exceeds the volume-per-bar specified for the chart, then that individual transaction will be displayed [I]divided between two bars[/I]).
In general, if you want to “see quickly what’s going on in terms of market activity and volatility”, I think it’s fair to say that tick charts are better than time charts, and volume charts are even better than tick charts. At least, it’s what I’ve found, and firmly believe, myself.
In the case of forex, “volume charts”/“volume bars” are not available for “spot”, only for [I][U]futures[/U][/I] (because spot forex has no objective, centralised exchange, just a nebulous “interbank market”).
[U]No[/U] - a “tick”, as defined in the context of forex charts, is an individual transaction, regardless of price-change (if any) and size.
With various kinds of [U]futures[/U], the word “tick” has a different meaning, and is indeed a price-movement (of different sizes for different instruments), but that has nothing to do with spot forex, which is what about 99% of this forum’s posts relate and refer to.