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Tick Chart vs Time Chart

July 26th, 2019 by dimpledbrain

The normal chart that we see is a time chart. Take for example a daily chart. Regardless of any buy and sell transaction, at the end of the day, there will be a record.

A tick chart on the other hand, only records something on the chart when there is a transaction. If there is no transaction (buy & sell activity), there will not be any record on the chart.

So a tick chart can be viewed as a compressed version of a time chart

Put another way, if there are 10 days of data, you will see 10 price bars on a time chart. On a tick chart, it will depend on how you set it. (for example, only record change if there is RM1 change)

Assume the above data – on a daily chart, you will see 10 data points. On a tick chart that is set to record any change of minimum RM1 (called reversal amount), then on Day 6 and Day 7, there won’t be any record (since the price is similar to Day 5’s). The last data point will be on Day 5 at RM12. The next data point will be on Day 8 at RM10. Ditto for Day 9 & Day 10.

The above tick chart is based on RM1 reversal amount. If you set the reversal amount to be RM2 (meaning, only record any change is there is an RM2 change), you wont see Day 2 data for example. Day 1 is RM10, Day 2 at RM11 only has RM1 change.

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