Tick Trading Strategies

Tick Trading Strategies - Volatility In Direction And Momentum

Tick Trading Strategies - Volatility In Direction And Momentum

The tick chart is a sea of volatile movement, but nonetheless it can be used by a human trader. A way to use the tick chart, is to ally it with a (relatively) longer term chart which can be more easily read by the human trader, for example the one minute chart. The one minute chart is a kind of middle way between the tick and short but not very short term trading and can be used for entry based on a range of trading time frames.

However the one minute chart can also be traded on as it has patterns as other time frames have. In fact the one minute chart may be used to look at slices of patterns forming on higher time frames, for example retracements or moves which become horizontal. Within a calm non-directional move on a higher time frame may be a short term move, such as a trend. However the one minute chart is prone to changes in direction, that is its structured move are volatile. If the trader is scalping and wants to trade on momentum, they can find that the momentum can change and may change chart direction.

Thus the tick chart can be examined to look for clues about changes in direction and momentum. The tick chart is harder to read than the 1 minute chart, but it can show broadly patterns such as momentum changes. However trading on the tick chart can be tiring and thus may be used with short term trades. In general a strategic use of the tick chart is to look for coarse grained changes in momentum which may be given some kind of meaning when seen in the context of the 1 minute chart.

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