Hubert Senters here.
Let’s go over several different definitions of a tick. So there are several different ones. And sometimes it can be confusing especially if you’re a new trader. So there is the tick which is the market internal so which is what we’re looking at right now. So this is the tick as a market internal cash sign, TICK.
This is the number of stocks up kicking divided by the number of stocks down ticking. And it’s considered the RPM gauge of the market. So that’s one definition of a tick. Okay. Another definition of a tick oddly enough is a minimum move in a futures contract. So for this example this is the Dow mini and it moves in one point increments which would be considered one tick.
So when it goes from $25,322 to $25,323 that’s considered one tick. Same way like if you did the ES it trades in quarter tick increments so let’s go add ES so the ES would work like this $2,782,75 and then it would go $2,783. That would be a 1 tick move because this thing trades in quarter tick increments. So every kick is a quarter point.
Now, the last thing is called a tick chart. Okay. Now, tick chart we’re looking at a two minute timeframe of the ES so I’m going to go back to the YM. Now, I’m looking at the YM and what we can do is we can do a drop down. And now we can do tick chart like now looking at 25 tick bars. So each bar each of these candlesticks is going to have 25 ticks or transactions in that chart and I can change that to anything.
I can say like let’s make it. Let’s go 233 ticks. So that’s a 233 tick bar per candle. I’ll go 500 tick chart. Now, every candle’s worth 500 ticks so make sure you know because that is the most confusing thing in the futures is what’s the tick and you’re like okay, what are you talking about? Are you talking about the market internal tick? Are you talking about the transaction of a futures contract or are you talking about a time interval or a tick interval on a chart? Anyway, hope I did not confuse the matter worse than it already is and I hope it helps and I’ll see you on the next video.
Hubert.
