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Tick charts for the ES


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Tick charts for the ES

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  #1 (permalink)
CAPITAL FEDERAL
 
 
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Hello everyone, I wanted to ask a question about ticks charts, Ive been reading about it and it seems to be better than a time based chart, but theres not a lot of info on how many ticks are best for each instrument. Some say for example that for the ES is best to use 610 because is a fibonacci number, others say its too fast and whatnot.

So I wanted to know your opinion on ticks charts and whats the recommended tick or how can i test it.

Thanks.

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  #3 (permalink)
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cronosis79 View Post
Hello everyone, I wanted to ask a question about ticks charts, Ive been reading about it and it seems to be better than a time based chart, but theres not a lot of info on how many ticks are best for each instrument. Some say for example that for the ES is best to use 610 because is a fibonacci number, others say its too fast and whatnot.

So I wanted to know your opinion on ticks charts and whats the recommended tick or how can i test it.

Thanks.

Hi cronosis79

To be honest, I fail to see the relevance of a Fibonacci number applied to a tick chart in the manner suggested.

I believe picking a number for the tick chart is simply a matter of preference. It's about watching how the product (in this case the ES) moves and forming an opinion about how often, based on its movement, a new bar should form.

Also bear in mind that - whichever number you end up picking - during US regular hours the bars on average will form much quicker than during ETH, as more participants will increase the average rate of number of trades.


I don't think there is a 'magic' number. Just something that one feels comfortable with.

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xplorer View Post
Hi cronosis79

To be honest, I fail to see the relevance of a Fibonacci number applied to a tick chart in the manner suggested.

I believe picking a number for the tick chart is simply a matter of preference. It's about watching how the product (in this case the ES) moves and forming an opinion about how often, based on its movement, a new bar should form.

Also bear in mind that - whichever number you end up picking - during US regular hours the bars on average will form much quicker than during ETH, as more participants will increase the average rate of number of trades.


I don't think there is a 'magic' number. Just something that one feels comfortable with.

Thanks for your reply. What I meant about the Fibonacci sequence is from Investopedia where the say "Frequently, the interval of tick charts is derived from Fibonacci numbers, where each number is the sum of the two previous numbers. Popular intervals based on this series include 144, 233 and 610 ticks. (To learn more, see: Taking the Magic out of Fibonacci Numbers.)".

Thanks!

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cronosis79 View Post
Thanks for your reply. What I meant about the Fibonacci sequence is from Investopedia where the say "Frequently, the interval of tick charts is derived from Fibonacci numbers, where each number is the sum of the two previous numbers. Popular intervals based on this series include 144, 233 and 610 ticks. (To learn more, see: Taking the Magic out of Fibonacci Numbers.)".

Thanks for the reference to Investopedia. The author does not explain what is the rationale behind that.

There would be little difference from, say, a 200 tick chart and a 233 tick chart. The only difference is that in the 233 one there will be 233 trades in it, rather than 200.

I still believe that a number you're comfortable with works best. For example, I do use tick charts but on CL, and I have gotten used to a 200 tick chart. Given the volume traded on ES 200 is probably low but, again, it's down to personal preference IMO.

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Questions are :

- are swings clean ?
- how many false swing highs, lows ? Its normal to have false swings, question is how many you will have.
- main question is can you make clear trading decisions most of the time ?

If 610 is ok then also 611 and 609 are ok too.

If not a clean chart add +100 ticks and take look, still not clean add + 100 more.

In picture 100,200,300 and
1000,2000,3000 tick charts :


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lemons View Post
Questions are :

- are swings clean ?
- how many false swing highs, lows ? Its normal to have false swings, question is how many you will have.
- main question is can you make clear trading decisions most of the time ?

If 610 is ok then also 611 and 609 are ok too.

If not a clean chart add +100 ticks and take look, still not clean add + 100 more.

In picture 100,200,300 and
1000,2000,3000 tick charts :


The difference in the 1k-2k-3k ticks is amazing. Do you trade using tick charts?

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cronosis79 View Post
The difference in the 1k-2k-3k ticks is amazing. Do you trade using tick charts?

No, but you can give a try.

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xplorer View Post
Thanks for the reference to Investopedia. The author does not explain what is the rationale behind that.

There would be little difference from, say, a 200 tick chart and a 233 tick chart. The only difference is that in the 233 one there will be 233 trades in it, rather than 200.

I still believe that a number you're comfortable with works best. For example, I do use tick charts but on CL, and I have gotten used to a 200 tick chart. Given the volume traded on ES 200 is probably low but, again, it's down to personal preference IMO.


lemons View Post
No, but you can give a try.

I totally agree with both @xplorer and @lemons: there is no best number -- just try some charts and see what you like and what works well for you.

For instance, I have used 2000 tick charts for ES, and have gone up and down the scale (4,000, 8,000 etc. going up, and 1,000, 500 etc. going down) -- and they all gave tradable opportunities. The difference was simply whether they were longer or shorter-term situations, so your preference for trade frequency and timeframes would be the most important consideration. But all worked well.

(Why did I originally choose to start with 2,000 ticks? (a) it's a round number ( ), (b) I saw some charts of other traders using 2,000 ticks and they looked like the price action was understandable. But then I realized that reason (a) is irrelevant, and reason (b) applies to any chart, because it's just a matter of how much detail is shown, but price is still price.)

To complicate things, I eventually went from tick charts (each bar is a certain number of trades) to volume charts (each bar is a certain number of contracts, no matter how many individual trades.) Why? Once again, I had seen some charts using volume bars and liked what I saw.

What happened when I changed? Nothing, really. Charts still made sense. I picked different volumes per bar and they worked, the difference only being whether they were longer or shorter-term. Charts based on time (1 minute, 5 minute, 60 minute, etc.) work too; there is obviously a big difference in terms of being shorter or longer-term, but not much other difference.)

I've tried special fib numbers too. They do still make sense, but so do all the others I've tried.

So don't sweat some kind of magic number of ticks or volume or minutes per bar. There also are even more kinds of bars -- feel free to try whatever you like. There are differences, but there is no "best". It's mainly a choice of scale and how much detail it displays. The main thing is that short-term choices mean you have to respond more quickly, and longer-term ones don't move so quickly or show the same level of detail. Which ones you like may have more to do with whether you are more a short or long-term type of trader.

I still mostly use volume charts, and pretty much keep to the bar sizes I have gotten used to. But this is mostly just a personal preference at this point. Tick and volume charts show low-activity time periods, like the overnight hours, with fewer bars and show high-activity periods with more bars and with more detail. What works for you is a matter of preference -- try several and see.

Bob.

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cronosis79 View Post
Hello everyone, I wanted to ask a question about ticks charts, Ive been reading about it and it seems to be better than a time based chart, but theres not a lot of info on how many ticks are best for each instrument. Some say for example that for the ES is best to use 610 because is a fibonacci number, others say its too fast and whatnot.

So I wanted to know your opinion on ticks charts and whats the recommended tick or how can i test it.

Thanks.

i personally use for the ES 1000 and 4500 tick charts 1000 is great when we have trending days but i've been using the 4500 tick chart a little more in hopes of getting bigger swings in the market

for the nq i use 4500 and 6000

-P

it all depends on how fast and what size t/p you want i found for me its easier to get a larger t/p with a larger chart as im not looking at every little p/b

"Truth is not what you want it to be; it is what it is, and you must bend to its power or live a lie"-Miyamoto Musashi
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