Your Trading Edge Is *Inside* The Bars On Your Chart

In the last post, I explained where true short-term trading edges in the market can be found.  I used as an example the Delta indicator that tracks the proportion of transactions that occur at the market offer price versus the amount of volume that is hitting bids.  I also included a link in that post that directs you to software platforms where you can get the Delta data.

In this post, we'll look at a somewhat similar indicator, the NYSE TICK.  It is found on many charting platforms as $TICK.  It tracks the number of stocks at any time trading on upticks versus trading on downticks.  The chart above is from Sierra Chart, and I've used $TICK on e-Signal and other platforms that carry a full feed from NYSE.  I like Sierra, because of the availability of TICK calculations specific to Standard and Poor's 500 stocks, Russell 2000 stocks, etc.

The important point is that both Delta and TICK are calculated transaction by transaction.  As Trevor Harnett has observed, they are telling you what is happening inside the market bars.  That is where important edges can be found.

There are many sources of edge to be found in the TICK numbers.  As noted above, what they tell us is, at every moment, how many stocks are trading on upticks minus the number trading on downticks. That tells us, in real time, where we have buying pressure and selling pressure, and it tells us if that buying or selling pressure is increasing or decreasing.  We can also use a moving average of TICK values to serve as a short-term overbought/oversold measure, and we can use a cumulative total of TICK values to track the trend of buying or selling and identify bigger picture trading opportunities.

Above is a snapshot from yesterday's market.  The top panel is the NYSE TICK on a one-minute basis.  I drew a yellow horizontal line at the zero level.  The green line going through the NYSE TICK bars is a 15 period exponential moving average of TICK values.  Where I've drawn yellow arrows are spots where price of SPY (bottom panel) has made a fresh high or low, but TICK values have dried up.  That has led to short-term price reversals.  Those TICK divergences can mark useful trading opportunities.  Extremes of TICK can also alert us to the possibility of trend days in the market.  Important changes in market direction are often accompanied by shifts in the distribution of NYSE TICK values.

It's the transaction-by-transaction data that reveal the psychology/sentiment of other traders in the market.  If we look at those data in real time, we can see sentiment shifting and quickly jump on board those moves.  Studying Delta and TICK patterns day by day gives you a sense of pattern recognition to trade the market's psychology with deeper insight and greater confidence.

Further Reading:

After the Market Rally, What Comes Next?


forex trading forex factory what is forex what is forex trading forex market forex scams forex brokers forex com forex market hours forex news forex trading app forex trading for beginners how to trade forex best forex broker forex charts forex signals is forex legit pips forex forex investment ig forex forex calendar forex trading strategies hdfc forex card login best forex trading platform forex brokers usa forex cargo forex demo account forex exchange forex patterns forex reddit forex trading scams how to start forex trading tradera forex what is forex trading and how does it work what is leverage in forex best forex broker in usa best forex trading app forex app forex compounding calculator forex currency forex factory calendar forex profit calculator forex tracking forex trading platforms forex vs stocks learn forex trading lot size forex no nonsense forex td ameritrade forex forex cargo tracking forex definition forex login forex meaning forex pip calculator forex ranks forex reviews forex time zone converter forex time zones forex trading for dummies forex trading hours forex trading reddit free forex signals iml forex is forex trading profitable what is spread in forex best time to trade forex forex calculator forex candlestick patterns forex chart patterns forex com login forex correlation pairs forex day trading forex economic calendar forex for beginners forex session times forex stock forex strategies forex trader salary forex trading meaning forex trading reviews is forex legal live forex charts scalping forex us30 forex what is forex market what time does the forex market open when does the forex market open divergence forex forex com review forex factory news forex for dummies forex hours forex indicators forex market times forex pyramid scheme forex quotes forex sessions forex trading course forex trading signals

Iklan Atas Artikel

Iklan Tengah Artikel 1

Iklan Tengah Artikel 2

Iklan Bawah Artikel