Tick charts display a certain number of trades before printing a new bar and are often used by short term traders. Unlike time based charts, tick charts are based solely on the trading activity of each buy and sell transaction. Tick charts are commonly used by day traders who need to make quick trading decisions and do not have the time to wait for a 3 or a 5 Minute bar to close.
You can decide on your own tick chart according to your method. For example, a 1300 Tick chart would create a bar after 1300 transactions. Tick bars can be an essential tool in day-trading due to the fact that the number of bars will increase during high volume periods while decreasing during low volume periods. In essence, when volume increases, the activity tells us that there is greater interest (versus lack of interest) in the underlying market. This higher