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I have found that many traders are looking for tick-by-tick data in their Technical Analysis software without really understanding why they require it, hence this blog post.
Most Technical Analysts have a favorite timeframe for trading. Timeframe or resolution is what each bar or candle in your chart represents. If it represents 1-min, you are trading on a 1-min timeframe, if it is 5-min, you are trading on a 5-min timeframe. Now, one of the cardinal rules in Technical Analysis is that once you decide your timeframe for trading, you should stick to it and not make decisions until the candle or bar formation is complete. What that means is that if you are trading on a 5-min timeframe, you should wait for the 5-min candle to form completely before you make a final decision. In such a case, even if the data were updating tick-by-tick, and you were to make a decision in the middle of the 5-min interval, it would not be of much help, because the picture could change completely once the candle formation is complete.
So what timeframe should you use for your trading?
Choosing a Timeframe depends on a lot of factors like what kind of trading you are doing: day-trading, short-term or long-term. But, as a guideline, please note that majority professional traders out there find too many false signals for timeframes lower than 5 min (in fact some even find 5-min timeframes too fast for trading and hence trade only on higher timeframes like 15-min or even 1-hour), but the answer really depends on what type of trading you do. If you do trade on lower timeframes, make sure you have other ways of eliminating false signals (like making decisions based on multiple timeframes, for example).
Most Technical Analysts have a favorite timeframe for trading. Timeframe or resolution is what each bar or candle in your chart represents. If it represents 1-min, you are trading on a 1-min timeframe, if it is 5-min, you are trading on a 5-min timeframe. Now, one of the cardinal rules in Technical Analysis is that once you decide your timeframe for trading, you should stick to it and not make decisions until the candle or bar formation is complete. What that means is that if you are trading on a 5-min timeframe, you should wait for the 5-min candle to form completely before you make a final decision. In such a case, even if the data were updating tick-by-tick, and you were to make a decision in the middle of the 5-min interval, it would not be of much help, because the picture could change completely once the candle formation is complete.
So what timeframe should you use for your trading?
Choosing a Timeframe depends on a lot of factors like what kind of trading you are doing: day-trading, short-term or long-term. But, as a guideline, please note that majority professional traders out there find too many false signals for timeframes lower than 5 min (in fact some even find 5-min timeframes too fast for trading and hence trade only on higher timeframes like 15-min or even 1-hour), but the answer really depends on what type of trading you do. If you do trade on lower timeframes, make sure you have other ways of eliminating false signals (like making decisions based on multiple timeframes, for example).
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