If you use Tick and Volume charts in your trading, how do you determine the values for those charts? Do you have a process, or method, for determining the periods? Or do you simply use some random numbers for the values, regardless of market volatility? If you don’t have a method, you need to seriously consider why you even use these chart types.  

The way that I used to set the periods for my Tick charts was a slow a tedious process. I wanted my fastest tick chart to have a similar number of bars during the RTH session (Regular Trading Hours) as a 2-minute chart would. Let’s take an example for the ES (E-Mini S&P 500 Index Futures). For the ES, I would use the US Equities RTH session template (Trading Hours template), eliminating the low volume period after the stock market close, and then determine the number of 2-minute bars that make up that session. There are 390 minutes in the RTH session, so there are 195 2-minute bars for the session. To find the corresponding value in Ticks that would yield the desired goal, I would have to open a random Tick chart using the RTH session for the given instrument, and then add up the total number of tick bars for the past 5 sessions. I would divide the total bars by five (for the number of sessions), and then multiply by the value of the Tick chart. That value would give me the total ticks, on average, for the past five sessions. I would then divide that number by 195 (2-minute bars), and the result would be the value I would set for my fast Tick chart. I would repeat this process once per week, to adjust for market volatility. The same method could be applied to volume charts.

Rather than having to perform this method by hand every week, we decided to make a tool that would crunch the numbers we needed automatically; that tool is the Timeframe Tuner.