Tick ​​chart – What is it, definition and concept | 2022

A tick chart is a representation model used in stock market analysis. It stands out for not taking into account the time factor.

By means of a tick chart it is possible to measure price variations of all types of financial assets.

Its basic figure is the so-called tik, a graphic representation of the minimum increases or decreases experienced by a given value over time.

That is, it transfers changes in the price visually.

Do you find Economipedia useful?

If you often use our simple definitions, we have good news for you.

Now you can try our courses for free on-line economics, investment and finance at the Economipedia Campus. The section that we have created to help you advance professionally, in an effective and entertaining way.

This happens because the chart shows a tick for every match between supply and demand for a certain asset.

Over time, more and more stock market traders or operators work with this resource instead of traditional time-based charts.

How the tick chart works

These types of charts are widely used when analyzing the prices of financial assets at any given time or within a certain period of time.

These changes are motivated by the securities transactions that take place in the markets. Thus, by means of ticks it is possible to visually show these operations and their effect on the corresponding price.

Such representation is often made to scale, each tick representing, for example, a disposed amount.

In other words, it translates purchases and sales made and records their agreed price (this is how the price reached is marked)

See also  Series C – Financing | Economipedia

For this reason, professionals in the field of investment resort to its daily use over other alternatives for different reasons.

Main features of the tick chart

As a measurement and graphic representation model, a tick chart has a series of features to take into consideration:

  • Activity priority. This measurement element does not take into account periods in which no transactions are made in a particular instrument.
  • Tick ​​volume. This graph will be completed as the activity progresses. Thus, the greater the number of operations in the market that we observe, the more tiks will be displayed.
  • Decimal measurement. The values ​​displayed by the tick chart are represented in decimal form.
  • economic nature. The graph represents prices of each security in particular, transferring different amounts of an economic nature. That is, it uses monetary units.
  • Trend reading. The fact of observing stock market movements without taking into account the temporary variable helps to locate trend breaks more easily.
  • Complementary use. This type of chart is often used in conjunction with other investment alternatives or tools. The reason is to improve the trader’s analysis capacity and show a broader vision of the investment reality.

The most popular alternative to the tick chart is the time chart. The most common example is the intraday arrangement.

These models allow evolutions to be observed in terms of hours or significant periods of time.

Leave a Comment