Tick Charts Strategy for Binary Options
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Tick Charts Explained
Tick Charts are a different way of looking at a market’s movement, just like Renko Charts that we previously discussed. Most traders are used to normal price charts that are based on time intervals, such as 5-minute, 15-minute, 1-hour, 4-hour and so forth. Time is the only consideration with these. They will always have the same number of bars per trading day when using the same time interval. When we are referring to Tick Charts it is important to not get confused with the NYSE TICK Index. The NYSE TICK Index is something totally different. This index measures the number of stocks trading on an uptick versus a downtick.

What Exactly Are Tick Charts

Tick Charts form part of a category called data-based intervals. These charts give traders a chance to view price action from various data intervals instead of just time. Tick, range and volume bars are all examples of data-based chart intervals. These types of charts print a new bar each time when a specified data interval is met, regardless of how much time has passed.

How Tick Charts Are Calculated

Tick charts are created when a certain number of transactions have been made. You can normally adjust the number of transactions needed to fit in with your trading style. The more popular tick chart intervals are based on Fibonacci numbers. This is why traders use 144-,233- and 610-tick charts. With a 144-tick chart, for example, a new bar will print after 144 transactions have been made. Each transaction will only be counted once, regardless of the size. Some of the transactions can be larger than other. This is why some bars or moves on a line graph will be more significant compared to the other.   For example: If I trade one lot and the other guy trades ten lots. The order sizes are not the same, but it will still only count as 2 transactions on the tick chart.

How Can I Apply This To My Trading

Our Tick Chart indicator below works on a 1-tick basis. That means for each transaction made, the line will move up or down - how much will depend on the size of the order. These ticks will help you to determine the market volatility. The line graph will be more active during high market activity than what it will be during slower market activity.

Metatrader indicator for Tick Charts

As always, MetaBinaryOptions is offering you a free Metatrader indicator for helping you apply this strategy.

Click here to download the indicator 100% free

This indicator will automatically plot Tick Charts on your chart. Be sure to "Allow DLL imports" in Tools/Options/Expert Advisors before using the indicator. After applying the indicator to your desired chart, you will have to go to File>Open Offline>select pairs name, Tick, M1(eg. "EUR/USD, Tick, M1") and click open to view chart. You can choose to display it as a bar or line chart like shown in the example below

tick-chart-indicator-mt4

Figure 1 – Tick Charts indicator

Tick Charts Summary

In my opinion, data-based charts like tick charts have got its time and place in trading. Do not get too caught up deciding which chart to use. You should implement what works for you and your trading strategy. It’s better to keep things simple when trading Binary Options. As the saying goes: “Keep It Simple Stupid - KISS”.
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