Jump to content

Welcome to the new Traders Laboratory! Please bear with us as we finish the migration over the next few days. If you find any issues, want to leave feedback, get in touch with us, or offer suggestions please post to the Support forum here.

  • Welcome Guests

    Welcome. You are currently viewing the forum as a guest which does not give you access to all the great features at Traders Laboratory such as interacting with members, access to all forums, downloading attachments, and eligibility to win free giveaways. Registration is fast, simple and absolutely free. Create a FREE Traders Laboratory account here.

Soultrader

NYSE TICK's and TICK Strategies

Recommended Posts

What is a TICK?

 

A TICK is the number of NYSE upticking stocks vs downticking stocks. If 1000 stocks are upticking and 600 stocks are downticking you will get a TICK reading of + 400.

 

The TICK is a useful market internal tool to gauge market sentiment, design trading strategies, to prevent one from chasing, etc...

 

Traders use the TICK in various ways: some choose to fade TICK extremes, others use it to confirm market direction, and others incorporate the TICK into their trading setups.

 

In this article, I want to go over some of the TICK strategies and methods I personally use in my trading.

 

TICK HOOK

 

Let's begin with a TICK hook. The difference between a candlestick TICK chart and a line on close TICK chart is the visual TICK hook. A TICK hook is shaped like a "V" or an inverted V similar to a "N". At times they may look like a "W" or a "M". A line on close TICK chart shows this visually. Take a look below:

 

tickhookexamples.jpg

 

The yellow arrows point out some examples of TICK hooks. I use TICK hooks to enter as well as to exit. An entry would be made when the TICK's make a "V" or "W" hook. An exit would be at a "N" or "M" hook. TICK hooks also help a trader from chasing the market and timing a pullback. Instead of entering when the TICK's are at the upper range, wait for a retrace on the TICK and enter on a hook.

 

TICK FADES

 

A TICK fade is a common strategy used by many traders. The key here is to understand which TICK hook to fade. If TICK's remain above the zero line, you do not want ot be fading a TICK hook at the upper range. A TICK spending the majority of its time above zero indicates bullish internals. A TICK strategy in such an environment is to fade the lower TICK hook's. Below is an example of a TICK fade.

 

tickfadeexample.jpg

 

First thing you need to do is to wait for the TICK's to create a range. Once the TICK has placed its low and high, simply draw a horizontal line at both extremes. This the TICK range. Notice the two red horizontal lines on the chart above. Whenever the TICK's reach either side of the range, you fade the TICK. TICK fades are a little tricky at first to master. You need to create several rules in order to apply it to your trading strategies. For example, TICK fades on both sides work in a rangebound market. In a uptrending market you do not want to be fading a TICK hook at the upper range. Vice versa in a downtrending market. Play around with it and you will eventually start adding your own filters to TICK fades.

 

A second example is a TICK fade at an extreme reading. Traders will often fade extreme TICK readings of +1000, -1000, +1200, and -1200. I personally like to fade the extreme negative readings of -1000 and -1200. The markets will often bounce for a quick scalp. What about the positive extreme readings? I often find price to pullback and lift further after an extreme positive TICK reading. Take a look at the chart below.

 

tickextremepositive.jpg

 

The bottom chart shows a 1 minute candlestick TICK chart. The yellow arrows represents the TICK extreme readings of +1000 and more. On the price chart above, the yellow arrows indicate the same time the TICK's reached the extreme +1000 readings. Notice how price advanced and a TICK fade would of not worked.

 

One strategy I use is to wait for a pullback after a extreme positive TICK reading and enter on a TICK hook. TICK fades and TICK hooks are in no way exact science. Understanding market internals and market direction is important in increasing your probabilties of a winning trade using the TICK's. Observation and experience is key.

 

New TICK Low's and High's

 

In a trending environment I like to watch for a new TICK high/low to exit a position or to play a counter trend setup. In an uptrending market, a new TICK low can offer warning signals for a possible trend reversal. First thing is to bracket the TICK's after it has established its high and low range. Any violation below the lower range is a new TICK low. Take a look at the chart below.

 

ticklowsexample.jpg

 

The ER2 was in a steady uptrend all throughout the morning and lunch hours. A new TICK low hit indicated by the yellow arrow on both panels. The ER2 then went to decline for approx 4 points. Also notice the break in the trendline.

 

If I am in a long position, a new TICK low is usually an exit signal even if price has not yet reached my target. The way I see it is that there is a shift in market sentiment and a clear warning signal for longs. For a counter trend setup, in an uptrending market I would wait for a new TICK low and then short on a retracement in price or the TICK's. I consider this a conservative counter trend setup.

 

Bullish and Bearish TICK's

 

What are bullish TICK's? A bullish TICK occurs when the TICK's spend the majority of their time above zero. If the TICK's spend most of their time above zero in the morning session there is a good chance price will continue its uptrend. Take a look at the chart below.

 

bullishticksexample.jpg

 

Notice on January 19th, the TICK's spent the majority of the time above zero in the morning session. Also notice the uptrend in price. There is a good chance price will continue its trend which was the case in this example as price continued its uptrend in the afernoon session. When Bullish Tick's occur, you want to stay away from any shorts because you are fighting the trend. This is a great example when you should not be fading a positive TICK reading of +1000 or more.

 

What is a Bearish TICK? A bearish TICK is the exact opposite of a bullish TICK. TICK's spend more time below the zero line. However, a bearish TICK is not as obvious as a Bullish TICK. This is because TICK's tend to trade above and below the zero line even during a downtrend. It is extremely rare to see TICK's trading below the zero line the entire time. Take a look at the chart below.

 

bearishtickexamples.jpg

 

In this chart notice how the TICK's spend more time trading below zero in the morning session. This indicates bearishness and price declined. In the morning session, if TICK's make a "N" or "M" hook at the zero line and fail to break above zero, this indicates tremendous bearishness.

 

Final Thoughts

 

These are just some examples of TICK's in action. The best thing for any trader to do before applying it into your trading strategy is to observe, learn, and practice first. After you get used to trading with the TICK's, be creative and start developing more complex strategies using TICK hooks, TICK fades, etc... I combine TICK hooks at pivots. I also have an opening setup that I use combining TICK's and tape. I hope this article gives a brief idea for those new to TICK's or for those who have yet to apply the TICK's into their trading.

 

Happy trading :)

 

Soultrader

Share this post


Link to post
Share on other sites

I enjoyed your Tick article. Thanks. I'm wondering if you know how to apply a tick chart directly onto the price chart. I'm using Tradestation.

 

I noticed you were using an 800 tick chart with the ER2 and a 1 minute tick chart. I'm curious as to why you chose those time frames.

 

I read about a strategy where you look for a new high to be put in on a price chart but the tick fails to make a new high which would be a short signal. A long set up would be the opposite. The trader traded the es and had made a custom tick chart comprised of the s&p 500 stocks only. I'd love to know how to set this up but after reading your article I wondered if it would be just as effective a strategy and easier to set up with the regular tick and the er2.

 

One other strategy that has always facinated me is to watch for the dow to hit it's major resistance or support on a day or hourly chart usually at a big round number. When the tick fails, and hopefully the es gives some leading indication that a reversal is taking place, then you would load up on OEX at the money put options (or calls if dow is failing at support). The strategy calls for $20,000 in options and you would adjust the quantity of options accordingly on every trade. Option expiration week, when the options are priced low, you could wind up with 100 options on a trade for example. Naturally, one might need to build up to a $20,000 per trade level, but if one is good at reading the tick, I can see this as a way to hit consistant home runs.

 

Any thoughts on those ideas?

 

TJ

Share this post


Link to post
Share on other sites

Like any other system I read about, I have to ask the same questions

 

1) Has this been back tested? Which strategy or setup has the highest probability of success?

2) Do you make money trading these setups? What is your typical profit factor with these setups?

Share this post


Link to post
Share on other sites
Like any other system I read about, I have to ask the same questions

 

1) Has this been back tested? Which strategy or setup has the highest probability of success?

2) Do you make money trading these setups? What is your typical profit factor with these setups?

 

Soul, is the owner of this site and is not trying to sell you anything. This is not a system, but just an introduction on how TICKS could be used. If you want answers to your questions, put in the screentime and effort to get them yourself instead of expecting to have them spoonfed to you. If you feel his post is not useful, then just ignore it. The post is after all almost 3 years old.

Share this post


Link to post
Share on other sites

Not a very active member here. But great great article, I draw tick with bar chart instead of line and look for a red bar that erased a green on tick, which is essentially the hook setup.

 

Article was written few years ago, and still holds, curious if you have noticed a change in the tick patterns since the financial meltdown, I have, what's your take on that?

Share this post


Link to post
Share on other sites
I enjoyed your Tick article. Thanks. I'm wondering if you know how to apply a tick chart directly onto the price chart. I'm using Tradestation.

 

I noticed you were using an 800 tick chart with the ER2 and a 1 minute tick chart. I'm curious as to why you chose those time frames.

 

I read about a strategy where you look for a new high to be put in on a price chart but the tick fails to make a new high which would be a short signal. A long set up would be the opposite. The trader traded the es and had made a custom tick chart comprised of the s&p 500 stocks only. I'd love to know how to set this up but after reading your article I wondered if it would be just as effective a strategy and easier to set up with the regular tick and the er2.

 

One other strategy that has always facinated me is to watch for the dow to hit it's major resistance or support on a day or hourly chart usually at a big round number. When the tick fails, and hopefully the es gives some leading indication that a reversal is taking place, then you would load up on OEX at the money put options (or calls if dow is failing at support). The strategy calls for $20,000 in options and you would adjust the quantity of options accordingly on every trade. Option expiration week, when the options are priced low, you could wind up with 100 options on a trade for example. Naturally, one might need to build up to a $20,000 per trade level, but if one is good at reading the tick, I can see this as a way to hit consistant home runs.

 

Any thoughts on those ideas?

 

TJ

 

 

You can not combine tick and minute charts in one window. You can just place them close ;)

Share this post


Link to post
Share on other sites

Hi,

 

Good read and many thanks for sharing this, incidentally does anyone know the easy language code I could use to make a quick indicator for drawing the horizontal lines on the tick chart.

 

Think it would be useful to apply it to the chart and have the 1000,800,600 and the minus equivenlents on the chart rather than have to keep drawing them each time.

 

Many thanks,

Steve.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • Topics

  • Posts

    • Date : 3rd April 2020. Inured to the bad news.The markets are relatively inured to the bad news, as the weekly jobless claims have already given us the increasingly ugly news on the labor market. US equities are modestly weaker amid risk-off sentiment and an employment report that revealed a much larger than anticipated -701k plunge in March and a jump in the jobless rate to 8.7% from 7.0%.Meanwhile, the Dollar showed mixed reaction to the employment report. These numbers were worse than expected, though shouldn’t really be a surprise given the more timely surge in jobless claims figures seen the past two weeks. USDJPY initially fell to 108.25 before turning back up again at 108.60, while EURUSD fell to 1.0780 from 1.0800. USDCHF extended gains up to 0.9794, reversing nearly 76% of the decline seen since March 20.EURUSD concurrently carved out a 9-day low at 1.0774, making this the 5th consecutive day of lower lows while extending the correction from the 17-day high that was seen last Friday at 1.1148. The pair still remains above the low seen during the recent Dollar liquidity crunch, at 1.0637, before the Fed and other central banks stepped in to try and satiate the demand for cash dollars. Its overall outlook meanwhile, remains negative, with the asset extending well below all 3 daily SMAs and with its daily momentum indicators negatively configured. Hence the Dollar bid looks to hold.The March establishment and household employment surveys captured more of the early layoffs than the markets had assumed, with massive declines for payrolls and hours-worked, big drops for civilian employment, the labor force, and the participation rate, and the start of the upward march for the jobless rate. Wages were also firm, likely due to the concentration of job loss among lower-paid workers.The specifics: March nonfarm payrolls dropped -701k after February’s 275k increase (was 273k), which ended a 9.5 year run of employment gains. The employment in the goods-producing sector fell -54k from the 57k (was 61k) rise. Service sector jobs slumped -659k after rising 185k (was 167k) in February. Leisure/hospitality jobs plunged -459k from the prior 45k (was 51k) increase. Education/health care jobs were down -76k versus a 65k (was 54k) increase previously. Government jobs edged up 12k, with 18k added to the Federal payroll. The unemployment rate jumped to 4.4% (4.38%) from 3.5%. Average hourly earnings rose 0.4% versus the prior 0.3% gain.The weakness captured in the mid-month March jobs report may prompt downward revisions in the Q1 GDP estimate, on the assumption that the Quarter may capture more of the economic plunge than previously assumed.Beyond the timing of Q1 versus Q2 growth figures, however, the surprise in today‘s report is more the degree to which the surveys captured late-March events than the magnitude of declines, since the bulk of the jobs loss will still be captured in the surveys for April.Since the Fed is already in maximum easing mode, it is unlikely that reports like today‘s will alter the monetary policy path.Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • Since Yesterday 02 April 2020 CorsaForex Binary Options Broker is out from business We recommend you to trade with Binary. com (Online since 1999) with Binary Options 20$ No Deposit Bonus https://binaryoptionsfree.eu/binary-com-review-great-binary-options-customers-support/
    • re: stocks.  Imo,we have a long ways to go down before we get to ‘value’ .  “Even at the March 23rd low...the Wilshire 5000-to-GDP ratio was at 101.38 percent, the 73rd percentile”   No place to be shopping for 'value' Yet, with all the fake money flooding in, the stock mkt could still soar.  But - up is not really up.  The long ‘bull of the last dacade + was actually ‘bull’sht.  Bullsht = steady injections of more fiat, taking on cash flow dependent corporate debt to finance ‘supply reducing’ buybacks,  malinvestments galore, capital DESTRUCTION - all clouded by a steady stream of FALSE msm narratives and fake numbers - from top numbers (ie GDP, etc.) all the way down to individual corp reports and reporting. ... ie Any ‘bull’ action now is in the  category of obese elephant bull sht... And as I have been posting for years, we can’t use dollars as a measure anymore.  ie  Up is not really up https://mises.org/wire/what-if-fed-did-nothing and using dollars as a measure is getting worse and worse.  ‘money’ not ‘working’ anymore. .. https://alhambrapartners.com/2020/03/31/what-is-the-feds-new-fima-the-potential-for-a-shadow-shadow-run-is-very-real/ https://alhambrapartners.com/2020/03/30/no-dollars-and-no-sense-eighty-argentinas/ ... ” Another day, another trillion dollars.”   re:  “all clouded by a steady stream of FALSE narratives. “  Yes, sweetheart the same thing has been happening in the covidity lockdown ... a steady stream of FALSE narratives  https://medium.com/@caityjohnstone/peoples-skepticism-about-covid-19-is-the-fault-of-the-lying-mass-media-91216ad7fcf3  ... I just chuckle now anytime I hear any US press comment on/ criticise Russia or Chinese ‘disinformation’ .  Imo, China’s ‘Police State’ is currently only a tiny click or two worse than our ‘Pharm State’.   Re:  trading.  It’s been a wild wonderful wide range last six + weeks  to trade.  I have been preparing for it a long time and still didn’t capture as much as possible... for one thing, didn't increase/balance sizing for  those outlier bounces as robustly as I should have, etc ... but still it’s been amazing.  First signs starting to show up that ‘volatility’ is slowing down ... will deal with that by up sizing all positions appropriately. I’m no longer ‘trading’ fx.  I’m now speculating in fx.  ... gradually scaling into a pretty good sized dollar short...  do you make a distinction btwn ‘trading’ and ‘speculating’?   btw atlas shrugged about a “secret coin”.... I’m just sayin’    later... maybe
    • Date : 2nd April 2020. FX Action – 2nd April 2020.A 10%-plus rebound in crude prices catalyzed gains in oil-correlating currencies, including the Canadian Dollar and Norwegian krona, and other commodity currencies, while helping give stock markets a lift after a sputtering session in Asia. The wake of ugly 6.6 mln surge in US jobless claims, which was about double the consensus forecast, weighed on global markets. US equities reversed lower as risk appetite eroded again, taking back earlier gains, while Aussie for example has more than given up intraday gains, with AUDUSD presently pushing on lows at 0.6019, down just over a big figure from the intraday high that was seen during the Sydney session.The massive gain in initial claims, which followed a similarly hefty rise the previous week, was well anticipated but provided a timely reminder of what is to come.USDCAD has dropped by over 0.6%, driven by a bid for the Canadian Dollar amid a 10%-plus oil price surge. The pair posted a low at 1.4079, though has so far remained above its Wednesday low at 1.4060. A Bloomberg report, citing sources with inside knowledge, said that China is moving forward with plans to buy oil for its emergency reserves. Beijing is reportedly aiming to build up a crude stockpile that would cover 90 days of net imports with the possibility of expanding this to 180 days. China is the world’s biggest oil importer and is taking advantage of the 60%-odd collapse in oil prices. USOIL prices posted a 6-day high at $22.55, but still remain down by just over 65% from the highs seen in early January. This level of price decline in Canada’s principal export, while it sustains, marks a significant deterioration in the Canadian economy’s terms of trade. Assuming that China’s buying spree won’t close this gap substantially, given the glut of crude flooding the market, and given that demand will remain weak for a historically protracted amount of time, CAD should remain apt to underperformance. In the medium term, USDCAD could retest its recent 17-year high at 1.4669.Both the AUDUSD and NZDUSD rallied, although both remained within their respective Wednesday ranges against the US Dollar.USDJPY and most yen crosses, in particular those involving a commodity currency, have gained concomitantly with the improvement in risk appetite, which saw the yen’s safe haven premium unwind some.GBP is again ranking among the currency outperformers today, gaining over 0.7% versus the Dollar and by over 0.8% against both the Euro and Yen on the day so far. Market narratives have been pointing to the impact of the Fed’s launching of a new “FIMA” facility (announced Tuesday) , which will start on April 6 and allow foreign central banks to obtain Dollars without selling Treasuries. This will run alongside the swap lines created with 14 central banks, and the two should ease strains in global dollar funding. This is seen as a particular positive for the Pound, given the UK’s recently proven vulnerability to global liquidity shortages, with its large financial sector and dependence on foreign investment inflows (equivalent to about 4% of GDP) to finance its large current account deficit.The Pound had underperformed even commodity currencies during the worst of the recent global liquidity crunch, which ran from about March 10th through to March 19th, before measures by the Fed and other central banks provided a mitigating impact. Sterling lost about 10% of its value in trade-weighted terms over this period, and tumbled by 12% versus the Dollar, hitting a 35-year low, and an 11-year low against the Euro. The worst now looks to be over for the Pound, especially with markets starting to bet that the UK will ask the EU for an extension of its post-Brexit transition membership of the Union’s customs union and single market. Neither the UK nor EU has the resources to conduct detailed trade negotiations under the prevailing circumstance of the coronavirus crisis. This is seen as Sterling positive as it will avoid the possibility of the UK leaving the transition period and shifting a big chunk of its trade onto less favourable WTO trade terms.Always trade with strict risk management. Your capital is the single most important aspect of your trading business.Please note that times displayed based on local time zone and are from time of writing this report.Click HERE to access the full HotForex Economic calendar.Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!Click HERE to READ more Market news. Andria Pichidi Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
    • No one can specify that who can become successful in what time, it all depends on the skills you have applied and know;edge you have implied while trading.
×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.