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Best Chart Type for Day Trading Futures

A very popular question we get at Gorilla Futures and on our YouTube channel is" what is the best chart for day trading". It is our opinion that a tick based chart is the best chart to use for day trading futures. This is due to the fact traders are presented with multiple different trading signals throughout the day when using a tick based chart. Lets discuss a few of the other reasons below.

Time Doesn't Move Price

Re-read that again, time does not move price. Price is moved due to transactions and a handful of other items. If you know time does not move price, why do many traders still use time based charts? Most traders who use time based charts fall in one of two categories, first off is the group that doesn't know any better. Next is a group a traders who simply prefer the way time based charts move.


There is no right or wrong chat type/time frame but it is our opinion that if you are going to be day trading then you might want to consider a tick based chart. Tick based charts only move when transactions take place. Since transactions are what moves price, it makes the most sense to use a chart that moves the same way the market does.


Movement

Next up is lack of movement and let us explain. On a time based chart if there is no movement you simply get small irrelevant bars. This is due to the fact a time based chart is going to print a bar at the same exact time each time no matter if price has moved or not. This extra clutter on your chart an be confusing and misleading, that is another reason why we like tick based charts. If there is no movement then the chart simply doesn't print a bar.


A tick based chart has to wait until x amount of transactions has taken place before printing a bar. For example if you are using a 500 tick chart, that means 500 transactions have to take place before a bar is closed. If you are trading the same 500 tick chart and it is a slow day you wont see lots of irrelevant bars similar to a time based chart, instead the chart will only print when all 500 transactions have taken place.


Cleaner Charts

That's right we think tick based charts can produce cleaner signals. Many times when using a time based chart you may be signaled into the trade a bit late due to the fact you have to wait for the candle to close before the signal becomes complete. If you are using a 5-15 minute chart the signal may be long gone by the time the candle closes.


When it comes to day trading we are BIG fans of the tick chart, now there is no right or wrong way to trade and if you are a fan of time based charts comment down below and let us know why!


2 comments

2 Comments


Thank you this thought me a lot! What is the best tick chart to trade .. is it 500 or what do you suggest.

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Gorilla Futures
Gorilla Futures
Sep 23, 2021
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It really depends on what works best for you, do you like a faster chart or a slower chart? Each trader is different, try the 500 and try 1000 and 2000 and so on until you find what works best for you. The best thing about price action is it applies to all time frames.

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