The visual illustration of a stocks progress in day trading is called a tick chart
. It is additionally identified by some day traders a Stock EKG or Stock Electrocardiogram chart since it looks like an electrocardiogram, a heartbeat recording. To be able to view a sample image of a tick chart, one can search for a day trading blog. Each time a transaction occurs, a volume bar and the price of the trade appear on the chart.
A tick chart can do a couple of things for a day trader but one thing it cannot carry out is make the decision for him. What he needs to do is learn to read the chart and use it to his advantage.
Using this chart, a day trader can far better see the minute by minute price changes of a security. This is a necessary feature since before making a deal, a day trader has to ensure it is not a quickly dropping or swiftly rising trend. The tick chart can even notify a day trader about the liquidity of a certain security. A day trader will be able to determine very easily the volume and exactly how actively the stock is being traded. This tick chart feature can help a day trader decide regarding the perfect timing in buying or selling a certain stock.
A tick chart is also beneficial to a day trader in identifying the velocity at which a stocks cost is shifting. This is therefore notably beneficial in momentum day trading. What momentum day traders like are stocks that progress strongly in one direction. Precisely what a momentum day trader does is get on the bandwagon in order to gain profit. Normally, to become prosperous at momentum day trading, a day trader has to be able to memorize how quickly along with what pattern the stocks price is growing. A tick chart will enable the day trader to exert all energy in making better judgements at day trading and clear away the need to remember everything since it clearly shows the recent stock price changes.