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ptcman

Choose a Chart Time Frame

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Hi.

 

Time frames. Which one?

 

I've always traded using minute charts. 1 minute for signal a trade and 5 and 60 min to follow the short and medium trend.

 

Now, I read and see many people talking about tick charts, using whatever number they fell is the best, 1 tick, 50 ticks, 144 ticks, 256 ticks...

 

What I'd like to ask you guys, are your opinions regarding tick charts.

 

When dealing with time, regardless of 1 minute or 60 minute frame, we are measuring something real, that is, time.

When dealing with ticks, I feel that it's not real. Let me explain.

 

Each ES tick equals to 0.25 point, so a 8 tick chart equals to a move of 2 points, meaning that a new bar would be created every 2 point move, correct? Isn't this an arbitrary number to choose at which we will trade?

 

I just remember something while writing this, a tick chart would help us measuring the length of each swing in terms of $.

An 8 tick bar would mean a $100 bar worth.

 

At the end, all comes to the same, what to think about tick charts? Are they better than minute charts? Are they compatible with each other?

 

Please leave your thoughts on it.

 

Regards.

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In the instance of tick charts, lets say 144 tick chart, a new bar is formed after 144 trades have taken place. In the sense of tick charts, the "tick" is referring to trades and not so much "up ticks" or "down ticks". Make sense?

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In relation to choosing tick chart periods, it seems to me that using Fib numbers blindly (as many appear to) has no logical basis. I can see the sense of trading e.g. the tick number which most closely corresponds to a 15, 60, or 240 minute candle period for that instrument at that instant (because everybody else is trading on those), but why would Fibs produce useful numbers to create tick charts with?

 

Max

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I can see the sense of trading e.g. the tick number which most closely corresponds to a 15, 60, or 240 minute candle period for that instrument at that instant (because everybody else is trading on those) Max

 

Hi Max.

 

How to choose a tick number that correspond to a 15 or 60 minute chart?

Is this choice made by a simple eye comparison or there is some math calculation behind it?

 

Regards

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Hi.

 

Each ES tick equals to 0.25 point, so a 8 tick chart equals to a move of 2 points, meaning that a new bar would be created every 2 point move, correct? Isn't this an arbitrary number to choose at which we will trade?

.

 

That's rangebar, not tickcharts ;)

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Hi.

 

Time frames. Which one?

 

I've always traded using minute charts. 1 minute for signal a trade and 5 and 60 min to follow the short and medium trend.

 

Now, I read and see many people talking about tick charts, using whatever number they fell is the best, 1 tick, 50 ticks, 144 ticks, 256 ticks...

 

What I'd like to ask you guys, are your opinions regarding tick charts.

 

When dealing with time, regardless of 1 minute or 60 minute frame, we are measuring something real, that is, time.

When dealing with ticks, I feel that it's not real. Let me explain.

 

Each ES tick equals to 0.25 point, so a 8 tick chart equals to a move of 2 points, meaning that a new bar would be created every 2 point move, correct? Isn't this an arbitrary number to choose at which we will trade?

I just remember something while writing this, a tick chart would help us measuring the length of each swing in terms of $.

An 8 tick bar would mean a $100 bar worth.

 

At the end, all comes to the same, what to think about tick charts? Are they better than minute charts? Are they compatible with each other?

 

Please leave your thoughts on it.

 

Regards.

You sound like you are talking more about a Range bar chart when you talk about an 8 tick chart moving 2 points. Tick charts depending on how many ticks you want to show for each bar can move very little or quite a bit for each bar. Range bars will form for a specified number of ticks you want it to, for example if you use a 4 tick range bar for ES it will move a point (4-ticks) and when it moves 1 tick higher or lower than the 4 tick range it will start to form a new bar.

If you want to use a tick chart and are not sure how many ticks you want to use you may want to compare it to a time frame chart (say 1-minute) to see if it moves fast enough or slow enough for you forming each bar. It will vary throughout the day and if you include overnight sessions you may see some very large bars form. Hope this helps.

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I have tried tick, minute, range and volume. Bottom Line is Price is King! It is all about the date and how that interacts with price. It does not matter what chart you use. I prefer at least a 30 minute chart and take my entries when more than one market lines up. For instance today is the 23rd. Merry Christmas everyone cause here comes the presents: You have 2 digit dates and 4 digit dates.

For the es 1256=23 12+5+6=23 that is a 4 digit date. And it will go in increments of 9 points on the es.

2 digit date is obviously 23 but then goes in increments of 9 also =32, 41. 50, 59. For the YM it is like an odometer. take off the last digit. Same with currencies. So the high this morning is 50 ( 2 digit) and low right now is 1148=23. PRICE IS KING! Whole lot more but all the time I have. Merry Christmas and happy trading.

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I agree on trading the Fib numbers. I have never understood it. I have often heard the expression "It just makes sense". Doesnt make sense to me.

 

Personally I trade off of both the 5 min ES and 3200Tick ES. I find that these two time frames produce similar charts but they give me the benefit of looking at the volume in two different ways.

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Tick charts and time charts normally cannot be lined up in a way that will stay constant over the course of a day because the number of trades (ticks) per minute can (will) vary widely over the course of a day.

 

While a 144 tick chart may correspond to a 1 minute time frame during one part of the day, it may require a 300+ tick chart to give that same resolution at a different time of day.

 

ptcman, in your initial post, you referred to tick charts but seemed to be talking about a range chart. A tick chart forms a new bar after N trades (regardless of the volume traded each time) whereas a range chart (momentum for TradeStation) forms a new bar every time price breaks an old range.

 

For example, 144 trades would produce one full bar and the beginning of a new bar, whether each trade was a 1 lot or 100 lot. A range bar would be produced on a 10 tick range bar chart if the 6E (EC for TradeStation) had traded 1.3011 - 1.3020 bar 1 and then traded either 1.3021 or 1.3010 producing the beginning of bar 2.

 

I hope that helps.

 

Scott

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Tried a reply before but did not work.

I have tried all types of charts with indicators. Tick, range, second, minute and volume.

Bottom line is PRICE IS KING!. And to further that statement the date is critical in trading.

 

You have a 4 digit date that goes in increments of 9 (gann's square of 9's)(; which everyone who is selling something related to gann has no idea of what they are talking about)

So for example today the 23; Price would be 1256; 12+5+6=23

Add or subtract 9 points and those are the 4 digit price/date

 

Also two digit date such as 23. Add or subtract 9. So 32, 41, 50 and so on.

On the ym and currencies they are like odometers. Remove the last digit.

So this moring high on YM is 1150_ and low is 1148.

Merry Christmas! Indicators do not work. Price is King. There is alot more but this should make you quite a bit of money.

Todd

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How many ticks?

 

Simple: 1 tick chart.

 

What reason might there be to have a bigger span (10 tick, 144 tick...)?

 

1. Computer too slow

2. Not more readable for humans

 

1. That does not happen with modern computers.

2. Happens, if you try to look at contracts with very many ticks in short time frames (mainly ES, 6E, CL). For beginners I would not recommend to look at these anyway. The infomation is indeed overwhelming and you cannot learn to see what drives the market.

2. Is not a problem if you look at contracts like YM, ZS and the like.

 

On the other hand:

If you look at 1 tick charts you can see things that otherwise you will never realize.

 

Never understood why people are again and again hampering themselves.

(Looking at longer tick frames means loosing information)

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Let's look at the objective of trading, and then work backwards. The objective is to determine when the trend is going to reverse. That's the objective. Yes the objective is to make money, but you can't do that unless you are on the winning side of the price move.

So, . . . can tick charts provide a better indication of when the price is reversing? My opinion is, it all depends on how you read and interpret the information, and how your indicators and/or programs process the data.

The classic example I would like to give, is a long tail on a candlestick or a bar. What does a long tail on a candlestick of a bar mean? It means that the price surged very quickly, but failed to maintain that new level.

On a shorter time frame chart. you may not see the long tail on the candlestick or bar. You may see a gap from one bar to the next. So the way you would interpret and process that information is different. On a longer time frame chart, you will see the long tail, on a shorter time frame chart, you won't see the long tail. Both situations are giving you the same information, but it's displayed differently, and must be interpreted and processed differently.

Therefore, what I'm saying is this; it all depends on how you, your indicators and your programs process, filter and interpret the data.

People process information in different ways. I can look at a chart and have a different perspective than someone else. The bottom line is, what works for you.

I stopped using very fast tick charts because, FOR ME, it's information overload. FOR ME, it's more confusion than a help. FOR ME, it takes my focus away from the longer, real trend and makes me focus on noise. Focusing on noise is bad.

So, FOR ME, I prefer a 1 minute chart compared to a 133 tick chart. As for different aggregation periods, I don't use them, so I'm only giving my opinion in regards to a very specific situation; 1 minute charts vs. 133 tick chart.

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pctman, I just re-read my post about tick charts and put 144 where I meant to type 145 (144 ticks for bar 1 and 1 tick to begin bar 2 on a 144 tick chart).

 

As to why people use Fibs for tick charts; I can tell you I do it because 144 feels much cooler than 150 ticks or 233 is more fun than 250.

 

Trading is how many of us (me included) make our living; that doesn't mean we can't have fun doing it.

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ptcman asked above:

 

How to choose a tick number that correspond to a 15 or 60 minute chart?

Is this choice made by a simple eye comparison or there is some math calculation behind it?

 

As SCOTTB says above, the problem is that the time it takes for any given number of trades to go through varies during the day, and will rarely be the same day on day - so although it appears to make sense, it's difficult to create parallel tick and time charts in practise.

 

Would anyone care to explain the logic behind using any particular tick number (fibs or otherwise?) for charting?

 

Max

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Hey guys, your answers are being very useful.

 

Like I said at the beginning, I've always used minute charts, and those are the ones that I always felt good trading.

 

Having said that, we are in a constant learning process when dealing with the markets. Always searching for new tools to enhance our system/strategy.

 

I liked the idea of having tick charts to help us reading the volume that has been traded, and here is where I've been stuck for the last couple of weeks.

 

It's been hard to read and understand the concept of tick charts.

 

Maybe the fact that I always associate price movement with time is blocking my perception towards tick charts.

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the one thing good about tick charts is that we sometimes want to remove time ---especially in off hours when volume is lower than the day session. This can help maintain the "pattern" or wave look of price performance ---- without time skewing it.

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Am I right in saying that if one uses tick charts on spot FX data (you can do this on e.g. TradeStation with no 'true' volume available), then each 'tick' represents one line on Time & Sales, ie one deal, whether it's one lot or 20? Do ECN or Currenex based accounts (e.g. the Interactive Brokers ECN system) show true volume for that particular ECN?

 

Max

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Currenex shows volume at the levels like the futures and will report trades that happen on its platform but there is no way to know what trades or even what prices are on other venues.

 

One thing that works just fine though is using the futures as a proxy. The arbs won't let prices get truly out of sync with the cash for more than a second, therefore, once you abstract out the interest rate differential (the futures/cash spread that particular day), you can line up futures volume with the cash.

 

It won't be perfect but it is very close if done correctly.

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Let's look at the objective of trading, and then work backwards. The objective is to determine when the trend is going to reverse. That's the objective. Yes the objective is to make money, but you can't do that unless you are on the winning side of the price move.

 

Or when a trend is still in play and you can just hop on that train.

 

;)

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Am I right in saying that if one uses tick charts on spot FX data (you can do this on e.g. TradeStation with no 'true' volume available), then each 'tick' represents one line on Time & Sales, ie one deal, whether it's one lot or 20? Do ECN or Currenex based accounts (e.g. the Interactive Brokers ECN system) show true volume for that particular ECN?

 

Max

 

You can estimate volume (relative volume) with Market Profile if you are hell bent on trading currencies.

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i use minutes time frame because thats the average time i hold my trades. If you hold your position for days or weeks i dont think there is a point to look the 1minutes chart....

 

thats my advice !

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