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Volume VS Tick Charts - Some questions


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Volume VS Tick Charts - Some questions

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  #1 (permalink)
Ljubljana Slovenija
 
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Hi guys, i would like to hear some oppinoions on Tick Charts and Volume Charts. If i am correct from Tick Charts Professional and Amateur activity can be seen which is probably a good thing. Yet how are the channels working on Tick Charts? Are they Skewd? Are Chanells better and more reliable on Volume Charts?

Thank you in advance for all the answers.

Regards,
Klemen

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hachot View Post
Hi guys, i would like to hear some oppinoions on Tick Charts and Volume Charts. If i am correct from Tick Charts Professional and Amateur activity can be seen which is probably a good thing. Yet how are the channels working on Tick Charts? Are they Skewd? Are Chanells better and more reliable on Volume Charts?

Thank you in advance for all the answers.

Regards,
Klemen

My experience has been there is no important difference.

You could make a case for volume charts being "better," because tick charts count all trades as being the same, which they are not, but volume charts show the actual amount of trading taking place in terms of contracts changing hands. But, at least for the S&P (ES), I don't think that amounts to that big a difference.

There is, in fact, almost no difference in the charts that you are likely to find noticeable to the eye.

Here is a volume chart for ES, arbitrarily using 30,000 volume.




Here is a tick chart, using 10,000 ticks. The ratio to the volume chart is based on a rough rule of thumb that the average trade on ES is a little less than 3 contracts, and doesn't vary all that much. You could fine-tune that ratio if you wanted, but it wouldn't make much difference. You can see on the volume underneath the tick chart that it stays at about the same level most of the time, and, in any case, the tick and volume charts track each other well. They would be closer if I fiddled with the ratio a little more. But they both represent price action well.




I would say that channels, lines, and non-volume-based indicators will be the same, pretty much.

Larger volume-based tools, like VWAP and Volume Profile, will be the same.

Because both charts compress the non-regular trading hours due to their lighter activity, channels and trendlines will not necessarily be the same as time-based charts (minutes, etc.) between the pre-market and regular market times.

There's a fuller discussion in another post I did the other day, with good comments from other members, here: https://futures.io/traders-hideout/38657-es-s-p-500-futures-contract-chart-layout.html#post555942

Bob.

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Thank you bobwest for your comprehensive answer

Regards

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  #5 (permalink)
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About tick and volume chart I would say the devil is in the details:

below you can see the same instrument with the same indicators and the same setting. They do not look the same.

If won't speak for ES (I don't trade it) but for CL there is a big difference at least for me. And I can guess that depending on the instrument you will find some.

If you are interested in measuring the "participation" or the order flow tick chart will give you a better picture. Of course algo orders that splits large orders in batch of small orders and HTF change the picture so 100 orders does not mean 100 different participants wanting to buy or sell but it is the closest picture we could have.



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Okina View Post
About tick and volume chart I would say the devil is in the details:

below you can see the same instrument with the same indicators and the same setting. They do not look the same.

If won't speak for ES (I don't trade it) but for CL there is a big difference at least for me. And I can guess that depending on the instrument you will find some.

Sure. I don't know anything about CL, for instance.

As with everything, you need to decide what works best for you.

I would just say that I would not compare charts with the same settings, but would adjust the size of the volume bars by the size of the average trade, so, in ES, you could compare 30,000 volume to 10,000 ticks, or something similar, because the average trade is a just a bit under 3 contracts.

I used to use 1,000 tick charts in ES, and switched over to 3,000 volume charts and ran them side-by-side for long enough to be happy about it. (I switched because the CME was talking about changing how they reported the number of trades -- which you may recall about a year ago -- and I wanted to just avoid the whole issue. It turned out not to matter apparently, but I'm OK with staying with volume charts now.)

As always, it's going to be an individual decision, and many things will work well.

Bob.

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