[Soultrader]

NYSE TICK: The TICK is the numbers of upticks on the NYSE versus the number of downticks on the NYSE. For example, if 1000 stocks are ticking up and 400 stocks are ticking down you will get a TICK reading of +600. The TICK is a tool for understanding market internals.

One of the best ways to use the TICK is to fade the extremes. A TICK reading of -1000 or -1200 is fairly rare but when they do happen, it is usually a good fading opportunity. The markets will usually bounce after such extreme negative readings. The TICK can also help you from chasing the markets. Instead buying when the TICK is reaching +1000, buy the pullback of the TICK. Wait for a retracement of the TICK back to the zero line and buy the moment the TICK hooks back up at the zero line.

The TICK is sort of like the engine and price the car. If the TICKS are heading upwards but price can not lift, this is a clue of market weakness. Ideally you want both TICK and price to follow each other. If TICK makes a new high, you would prefer to see price making a new high. If price can not, you will have a TICK and price divergence and a good fading opportunity.

I will also bracket the TICK extremes. I plot a horizontal line across the low and high TICK readings. If I am long a position and the TICKS reach the upper extreme for the day, I will look to close out at least 3/4 of my position.

I hope this gives you a brief idea on the NYSE TICK. Feel free to post any questions regarding the TICK and trading setups using the TICK. Thanks