As an intraday trader, you would have worked with intraday price charts. These charts are based on time intervals including a five-minute, 15 minute or 60-minute slots. This type of categorisation indicates that one bar — either candlestick or open-high-low-close — is published after every specified time interval. This indicates that to calculate the price charts only time is of consideration. Volume and trading activity do not have any bearing on intraday price charts.

In intraday trading, candlestick trading is a kind of price chart that reveals the highs, lows, open and closing prices of company stock for a particular time. Its origins lie in Japanese rice traders and merchants who developed this tracking method to examine daily market prices and volume before this concept became famous worldwide.

To get the best out of data based intraday charts, you may want to examine the price action from various data intervals instead of time intervals. Some examples of databased chart intervals include tick bar charts, volume and range charts. Regardless of the amount of time that has passed, these charts print at the end of a particular data interval.

• Tick bar charts reveal a particular set of transactions
• Volume bar charts display when a specific set of stocks have been traded
• Range bar charts indicate a pre-set value of price movement that has taken place

Here we look at how you can take advantage of databased intraday charts to make smart trading decisions.

Tick charts are advantageous because they allow traders to obtain data concerning market activities. If you notice a tick chart, you will see it is based on a specific number of transactions in each bar. Here you will notice if the market is most vibrant or dull or scarcely making a motion. You can assess market volatility with the help of tick charts. As against time-based intraday charts that work on a specified time interval tick chart intervals can be based on a wide range of transactions.

Volume bar charts are solely based on the number of stocks or volume traded each day. You can receive deeper understanding into a volume chart since it reveals the actual numbers purchased or sold online. Although they are similar to tick charts, volume charts display how rapidly a market is travelling by observing how many and how speedily bars are being printed.

Range bar charts are grounded on price changes. They give you the opportunity of examining market volatility. A significant advantage of reading range bar charts is that a lesser number of bars is printed at the time of consolidation. This can help to cut down market commotion encountered with other types of graphs. Additionally, range bar charts also deliver the same price information as time-based intervals that allow traders to zero in on entries with pronounced accuracy.

What is the best data interval?

Selecting the right data interval can depend on how you trade. If you are seeking bigger moves and intend on staying longer in a position, you may want to consider more significant data intervals. On the other hand, if you are making smaller trade moves and likely to move in and out of position rapidly, you may want to consider smaller data intervals. Unfortunately, there is no one-size-fits-all setting that encompasses every trading approach or personal choice.

Video on Types of Charts

Conclusion

Databased chart intervals offer a wide range of advantages to intraday traders because they allow you to observe the charts driven by various other factors, instead of just time. Based on your own style and strategy, you may want to adopt these charts and accommodate them accordingly. You may want to try out various data types and intervals to get the best combination suiting your methodology.