Relevance of Tick in FOREX

What is Forex Tick?

Many people are questioning me the same thing like what FOREX tick is, and how does this little thing affects FOREX Trading. FOREX tick is not that blood sucker unlike those little bugs. FOREX tick is an event when the price of a currency pair changes from A to B.As soon as a new price is registered, a new tick also occurs.

FOREX market is discrete. A discrete price changes that drives it is what we know as FOREX tick. There’s a central computer in the system that combines all of the buy orders and all sell orders, and computes a new price based on the supply/demand rule. This computer makes FOREX ticks with price shifts, and these adjustments are propagated to all FOREX brokers all over the world.

When the price of USD goes down with a gap as you often see on FX live charts, that is mainly because everyone wants to sell USD, and only a few people want to buy it. By its character, FX market cannot be consistent. The next price of a currency pair can only be determined when you have combined all sellers and all buyers.

You could also find some Forex currency trading approaches that can be based upon FOREX ticks. Just like gap trading which is based on ticks. Numerous scalping strategies are based on ticks.

By checking the tick chart, it is possible to predict the following tick movement and create a several pips of profit every few minutes.

 

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