Bar types: time, tick, range, and volume
Time is one way to decide when a bar ends. It is not the only one, and the alternatives change what your chart is measuring.
A bar closes when some condition is met. Almost every chart uses elapsed time, but that is a convention rather than a requirement, and the alternatives are worth understanding even if you never switch.
Time bars
Close after a fixed duration. Five minutes, an hour, a day.
The strength is alignment with everything else: the clock, the calendar, scheduled releases, the session open. When a data release lands at 08:30, a time-based chart shows you exactly which bar contains it.
The weakness is that activity is not evenly distributed. A 5-minute bar at the open and one at midday represent completely different amounts of trading while occupying the same width. The chart gives them equal visual weight.
Tick bars
Close after a fixed number of transactions. A 500-tick bar ends when 500 trades have printed, whether that takes ten seconds or an hour.
Quiet periods compress into fewer bars and busy periods expand into more, so the chart allocates space by activity rather than by clock. The cost is that time becomes uneven — you can no longer tell how long anything took by looking, and lining the chart up with a news event takes effort.
Note also that a “tick” here means one transaction, regardless of size. One contract and five hundred contracts each count as one.
Volume bars
Close after a fixed quantity has traded. Similar in spirit to tick bars, but weighted by size rather than transaction count, which some find a truer measure of activity.
Range bars
Close after price has moved a fixed distance. A 10-tick range bar ends when the span from its high to its low reaches ten ticks.
Every bar is the same height by construction, which produces a notably smooth chart. That smoothness is the appeal and also the problem.
Two things to know before using range bars. A bar cannot exceed its set size, so a violent move produces many identical bars rather than one large one — the chart cannot show you that the move was violent. And because bars only close on movement, a range-bar chart can sit unchanged for a long time and then print several bars at once, which means the most recent bar can be considerably older than it looks.
What changes when you switch
Every indicator on your chart. A 14-period average of tick bars is averaging a different span of market activity than a 14-period average of 5-minute bars, and the span is not constant. Readings are not comparable across bar types, and neither are settings.
Range and Renko bars specifically interact badly with anything measuring range, since range has been fixed by construction. ATR on a range-bar chart is close to meaningless.
Choosing
Time bars are the default for good reasons: they align with the clock, they are what most other people are looking at, and they do not hide volatility. Activity-based bars have real uses in markets with uneven participation. But if anything on your chart depends on measuring range, use time bars.