what's a tick ?

[BT_Techsupport]

Ticks have absolutely nothing to do with volume in a direct sense.

It is simply wrong to think of ticks as 'trades'. They are not. Ticks reflect one thing and one thing only - price changes. Yes, trades (volume) ARE required in order for price changes to occur, but in no way is the formation of a bar/candle on a tick chart directly connected to the number of trades or number of contracts traded - these are exclusively the domain of volume charts. You can have one trade, a hundred trades or a thousand trades completed, but if they are all done at the one price, the tick chart will not change.

Ticks are nothing but price changes and it is price changes that make a tick chart work.

[VTtrader]

BT,
To avoid future confusion with other people I didn't want this topic to end like that.

While you may not like what Bertrand and I said about tick charts and what constitutes a "tick", or agree that it "should be" that way. That is, in fact, the way it is in NT tick charts.

I have attached an indicator to prove the point. It will print to the output window what is happening intrabar. Simply apply it to a tick chart and check the output window (Tools -> Output Window).

The output will show for each trade/tick:

State of the current bar and bar number
State and current tick count for that bar
Price of the last trade/tick (set off with *** if it's the same as previous price)
And the volume of the trade

The things to notice, is how the tick count gets incremented regardless of whether the price changes or not. And when that tick count reaches the interval for the bar, a new bar is generated.

The terms "tick", "ticks" and "tic" get thrown around a lot in trading, and take on various different meanings depending on their usage. For example, someone might say "I'm using a 5 tick stop loss", certainly in that sense it does not mean "trades" but rather 5 minimum price increments away from the entry price.

I have read several different definitions of "tick charts" and indeed, one of them described them the way that you are. So there does appear to be some confusion, and some charting packages may use different methods. However, that is not the way they are implemented in NT. As the TickTest indicator shows.

Hope this clarifies the issue.

VT

[NinjaTrader_RyanO]

Hello VTtrader,

Thank you for sharing this utility.

[BT_Techsupport]

Thanks for that VT - yes, it appears that there is differing definitions (and applications) of the term 'tick chart' out there..

Perhaps it is just as well to leave this thread with the definition, interpretation and application that NinjaTrader has used in their tick charts, (which you have done) as that would have the most relevance.

Happy trading
Pete