A tick chart is known to be a different method of demonstrating forex market movements that helps forex traders to ascertain the general forex market direction, various current trends and future forex market movements/ fluctuations. These forex tick charts are made available by forex brokers who provides forex traders with trading platforms for the sell and buy of currencies.
In a time based forex chart, a trading period comes to a stop after a certain amount of time and for that set period of time, all forex market fluctuations and movements are kept in one candle stick pattern. However, unlike other forex charts, time is irrelevant in a tick chart. Here, each forex trade period is defined by a certain amount of trades. This only means that tick charts and time based charts generates different price charts, forms different patterns and indicated different aspect of forex market movements.
REASONS WHY FOREX TRADERS PATRONIZE FOREX BROKERS THAT OFFER TICK CHARTS
In a good trend, the movement of the forex market towards a trend direction is an indication of a higher volume that the correction in the reverse direction. This only implies that a tick chart have the ability to spread the movement in trend direction on a larger period and reduce the correction to a lesser period. Because tick charts indicates the most important part of a trend, forex traders tends to subscribe with forex brokers that offer tick charts.
When seen to be in a period of sideways movement, forex traders will always have to tell the direction in which the market will continue when the sideways movement comes to an end. This is where the use of a tick chart comes in. a tick chart functions as a volume analysis in the detection of the direction that has more volume. This helps forex traders make accurate trade decisions.
IT COMPRESSES LOW ACTIVITY PERIODS
A tick chart has the ability to compress low activity periods. This allows forex traders to decrease whipsaws and encourage a more continues forex market analysis in between days, with forex trades setting up pre-open on a forex tick chart.
IT PROVIDES A LOT OF CYCLICAL INFORMATION
I tick chart gives forex traders the ability to see more forex trade information and trade forex with great cycle analysis. These information is very vital to a forex trader in that it helps them pick out a bull back entry point hence, maximize profits and reduce losses at all trading times. This is also an important reason why forex traders work with forex brokers that provide tick charts.
In conclusion, the use of tick charts allows a forex trader to not only know the number trades during a transaction period but also the number of contracts traded. When suing a forex tick chart, there is no trade volume size.
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