Tick Size

The minimum price movement an instrument can make (e.g., 0.0001 in many FX pairs, or 0.25 in some futures).

1 min

Why it matters

It sets the granularity of stops, spreads, and “precision.” You can’t place risk in between ticks.

Decision use: treat this term as a risk input. If you can’t observe it, you can’t size for it.

Common trap

Designing strategies that rely on sub-tick precision. That precision is imaginary.

Example

If tick size is 0.25 and you try to set a stop 0.1 away, the platform must round it.

Operational cue: if you can’t point to it on the chart, in the DOM, or in your broker logs, treat it as a story and trade smaller.

Notes

If you see this repeatedly, you are in a different regime than your model assumes.
Regime change usually means position size change.
When in doubt: trade smaller, or don’t trade.