could anyone explain what does tick mean?

I read one sentence,

"As soon as you buy, place a stop-loss order one tick below the low of the trade day or the previous day, whichever is lower".

Could anyone explain to me what does tick mean? Many thanks!

A tick refers generally to one unit or one point of price movement. In Forex, a pip is the same thing as a tick. I'm assuming you know what a pip is.

Corectly and to complete if he does not what pip meens:

A pip is a very small measure of change in a currency pair in the forex market. It can be measured in terms of the quote or in terms of the underlying currency. A pip is a standardized unit and is the smallest amount by which a currency quote can change, which is usually $0.0001 for U.S.-dollar related currency pairs, which is more commonly referred to as 1/100th of 1%, or one basis point. This standardized size helps to protect investors from huge losses. For example, if a pip was 10 basis points, a one-pip change would cause more extreme volatility in currency values.

Assume that we have a USD/EUR direct quote of 0.7747. What this quote means is that for US$1, you can buy about 0.7747 euros. If there was a one-pip increase in this quote (to 0.7748), the value of the U.S. dollar would rise relative to the euro, as US$1 would allow you to buy slightly more euros.

Sorry guys to disappoint you, but a tick is NOT a pip...

A tick is generally referred to an immediate or real-time change in trade price, bid, ask, volume, etc....

So, if at 10:53:32 AM, the EUR/USD was bid 1.3480 and offer 1.3483 and then immediately the bid moves to 1.3482, that's considered a tick although the movement was actually 2 pips....The time period of the tick is undefined...Actually the time period of a tick changes according to the instrument activity....During busy times, you can get as much as 20 ticks per second, some other slow times, you can get a tick every 5 or 10 seconds...

Hope this clarified it...


Regards,

Nader

Hello,

Hmmnnn...

I'm not ENTIRELY sure that I agree with you 'narafa' or 'billflet'. Put it this way: at least not in the context that the thread starter is asking.

A 'tick' is the minimum allowed price increment of a particular instrument and in the thread starter's context (forex) one 'tick' is INDEED one FULL 'pip' (not a fraction of a pip where fractional pip pricing is being used). The thread starter is obviously looking at a trading system designed for equities or commodities where you would be required, for example, to place a buy or sell stop order five 'ticks' above the high or below the low of a certain (the signal) bar. As I said: in forex one 'tick' is one FULL 'pip' so the thread starter would (using my example figures) place a buy or sell stop order five FULL 'pips' above the high or below the low of a certain (the signal) bar. On the S&P though (for example): one 'tick' is 0.25 'points' so (again using my example figures) I would place a buy or sell stop order 1.25 'points' (5 'ticks') above the high or below the low of a certain (the signal) bar. You're talking about the FREQUENCY of 'ticks' and that's a little bit different.