What Is a Tick in Trading?
A tick is the smallest possible price movement of a financial instrument. It is the minimum increment by which a market’s price can move — either up or down — in a single step. Every time a price changes on your screen, it has moved by at least one tick.
The size of a tick varies by instrument, exchange, and asset class. In forex, price is typically quoted to five decimal places, making a single tick equivalent to 0.00001 — commonly referred to as a pipette. In futures markets, tick size is explicitly defined in the contract specification. The E-mini S\&P 500 futures contract, for example, has a tick size of 0.25 index points, worth $12.50 per contract. Knowing this is not optional — it is fundamental to calculating profit, loss, and position sizing on every trade.
How Ticks Appear on Candlestick Charts
Every candlestick on a price chart is built entirely from individual ticks. The aggregation of thousands of tick movements across a defined timeframe forms the open, high, low, and close of each candlestick bar.
Tick data reveals true market activity. Standard time-based charts show price over fixed intervals regardless of trading volume. Tick charts, by contrast, form a new candle after a set number of ticks — meaning each candle represents the same amount of market activity, not the same amount of time. During high-volume sessions, tick charts move fast. During quiet periods, they slow — giving traders a more accurate picture of when the market is genuinely active.
Wicks are made of ticks. The upper and lower wicks on a candlestick represent the extreme price points reached during that period. Every fraction of that shadow was formed one tick at a time — a direct record of buyer and seller conflict at the smallest level.
Tick Size, Tick Value, and Why Both Matter
Tick size is the minimum price increment — the smallest step a market can move. Tick value is the monetary worth of that single tick movement for a given position size:
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In forex, a one-pip move (ten ticks) on a standard lot is worth approximately $10
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In FTSE 100 futures, each tick is worth £5 per contract
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In US crude oil futures, a single tick (0.01) is worth $10 per contract
Knowing the tick value of every instrument you trade allows you to calculate your exact risk before you enter — not after.
How to Apply Tick Awareness to Your Candlestick Analysis
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Use tick charts during fast sessions — the London or New York open are better read on 500-tick or 1,000-tick charts than on time-based charts, giving you a cleaner view of genuine activity
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Calculate tick value before every futures trade — confirm tick size and tick value before sizing any position; a misunderstanding here can mean taking on far more risk than intended
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Read wicks as tick-level battles — a long upper wick signals sustained upward tick movement that was ultimately rejected; the length tells you exactly how far buyers pushed before sellers overwhelmed them
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Give stop-losses room beyond the obvious tick clusters — placing stops just one or two ticks beyond a key level is rarely sufficient; algorithms target obvious clusters, so measure your stop distance in meaningful tick increments
Risk Warning: Trading CFDs involves significant risk and may not be suitable for all investors. Losses can exceed your initial deposit. Please ensure you fully understand the risks involved before trading.
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