A forex tick can be defined as the minimum change in price of a stock or currency. The change can be upward or downward. Some ticks can be seconds or milliseconds apart. Volatility of the market may determine the time between ticks. This smallest possible price change is calculated by combining all buy and sell orders and creating a new price depending on the demand and supply rule.
Some traders base their forex trading strategies on ticks. You can predict the movement of the next tick and make some money. This trading signal can be invaluable to many traders.
Forex tick charts can assists you in making good money by following professionals. You can view the dips where professionals are buying forex and imitate their moves. You can also view the activity of the professionals in regards to selling security.
It can be clear when professionals are shorting the rallies by looking at the Forex tick volume. The size of the tick volume may show if amateurs or professionals are trading. If the volume is low, amateurs can be the ones trading but if high, the professionals are trading.
With the above in mind, you can easily fade out the amateurs by looking at the Forex tick charts. Visible small trades by amateurs may compel you to do the opposite. You may be able to view as amateurs buy late into rallies and short the dips.
Sharpening your analysis using Forex tick charts can help you in finding trade entries. The charts can help you to get clearer analysis of the resistance and support to better understand the trend.
The detection of the trends can be much easier when using tick charts when there is little buying or selling activity. A zero-trend environment can impact heavily on your trading decision if there are drastic changes in the support and resistance lines.
Another secret of using forex tick signals is the confirmation on breakouts. A breakout is defined as a price movement through a visible level of resistance or support. When the price breaks above the resistance, traders are highly likely to buy. If the price breaks below support, traders are likely to sell.
Forex tick charts can help in knowing when to exit the market. For instance, if a currency drops you may want to sell. You can draw a support line in your time chart to ascertain if its time to exit the market. If the price continues to drop and breaks the support line in the Forex tick chart, you can draw a different support line from the one in the time chart. If the market continues to go in the right direction for you, you can sell and wait for a buying opportunity.