OK, Friday. (best do this before 🍷)
So, I got asked why I use tick charts. Why I like them (and my beloved Heiken Ashi). I figure I will post the reply here, given others might be interested.
Now, I'm not saying this is best - Plenty traders do far better than me on 1m bars
Structure. Here's a 1 min chart with 100 tick nq inside it. I micro scalp. Being able to see more structure inside a bar is helpful to me. Smaller bars on tick are still 100 trades. It means a battle is happening. Larger bars indicate one-sided trade. Imbalances of power.
Filtering. Heiken Ashi
A huge amount of trading is psychology. Being able to filter some noise is helpful (to me).
Look at the following 2 charts. They are the same 100 tick chart. I know which one I can more easily hold a runner on, especially in real-time, when it is dancing!
Also, going up the scale a bit (300 tick), look at how the HA/tick bars compress. The bodies are small at turning points. There are wicks on both sides. Look at where the strong trends are. No wicks on one side. Big bodies. Again, I know which one I can read more easily.
That isn't to say I don't get granular. I'm also looking at inflection points on charts like this. This is the 'fine tuning' of entries and exits. I would however consider this an addition to an existing, working strategy. Something to refine, not make a strategy.
I found myself trading without the above chart for a very brief period a while back (I broke something!). I took a losing trade. I got the chart back, looked at it, and said to myself, 'no way I'd have taken that!'. Actually, at that point, I realised how important it is to me.
Going back to HA/Tick. Look at these pivots. 300 tick, but they look the same across all the time frames. They are so graceful! In real-time, I can see the event much more clearly. It gives me the conviction to take a position. To me, it makes the patterns more consistent.
HA candles convey momentum to me at a glance, in terms of their body sizes, wicks, and shape. I just can't read bare candles that well. These are all personal preferences. Find something that works well for you (which is what I did), then refine it.
A note - I trade mostly futures with exchange volume. 'Ticks' on CFD products etc., are likely very different in that there will probably be much less volume. You'll have to see what works well for you.
For me, MNQ, 75-150t entry, MYM, 50 tick entry, currently. That will change
Fiddle with your tick sizes/HA bars, until you can see clear trends, but not so much you can't size down enough to take any drawdown. CFD users probably have the advantage here! You probably want an anchor chart 3 x the tick size of your entry chart.
I hope this answers the original question

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More from @PJSmith

5 Nov
ha! Well, went exactly to where I thought it would. Top of the 5m range. Still could go a little further, but I'm OK. Got out early, saved a little pullback stress, made dinner (beef bourguignon 😋), poured a glass, so, I'm OK with it.
Happy Friday all.
And, at the completion of my first week of trading exclusively the YM, here's the result. It was not stellar by any means, but 1 red day (small), vs 4 good ones. And, most importantly, very little drawdown. The down day was that crappy holiday low volume one! My own fault.
Today, I changed from my usual scalps because of the run-up. I just can't buy it! Different trading really, but still OK. All in all, I've enjoyed it. Need to do a few more weeks with some more volatility to get a real feel, but, I think I can be more consistent in dow vs nq.
Read 8 tweets
5 Nov
🤔
Well, let's see if it sticks this time...
The FU pattern continues.
Read 5 tweets
3 Nov
YM Image
I don't normally hang on to trades that long, but, fomc. Got a few ticks of room then tolerated the wiggles on the way up as the buy delta in YM/ES was pretty relentless. It's one thing that can keep you in, then you sit back and enjoy watching the shorts get their nuts clamped!
How about that 60 min break. Was watching that too Image
Read 4 tweets

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