Shadowtraders

Trading Futures or Night Trading....Try The NYSE Tick Index

The Tick index is popular with day traders because it can be applied to high-frequency intra-day buying and selling in order to detect extreme overbought or extreme oversold conditions. Extreme positions often forbode trend changes for intra-day trading.

The Tick index is used on a technical analysis chart without any other indicators, no moving averages, no stochastics, no MACD. The index displays the number of up-tick issues (companies whose stock is trading higher) and the number of down-tick issues (companies whose stock is trading lower). The company is said to uptick if its latest trade sold at a price higher than the previous trade. The company is said to downtick if its latest trade sold at a price lower that the previous trade. If the latest trade is the same price as the previous, the index remains the same.

Generally, extreme overbought (top) or oversold (bottom) Tick index readings can be used in trading the Emini S&P 500 index futures contracts (ES). For day traders looking to make a few ticks on a trade, the ability to see tops or bottoms is invaluable.
If you are watching the $Tick chart, an extreme overbought condition would be above +1000. An extreme oversold condition would be below -1000. To effectively day trade with the $Tick index, go long on the bar after the -1000 is breached and go short on the bar after the +1000 is breached.

Another use of the Tick Index is when you are in a losing intra-day trade. If you are in a long position and the tick index reaches -800, chances are you will need to exit the trade with the loss. If you are in a short position and the tick index reaches +800, chances are you will need to exit the trade with the loss.

Day traders are always watching for ways to determine market direction. A extreme movement to the upside is a good indicator that prices will go down, while an extreme movement to the downside suggests an upturn is coming. Bottom line, the Tick index can be used as an indicator for this purpose. Think of the Tick index as an extreme version of Stochastics. While both measure overbought and oversold, the Tick index shows extremes and good entry points following the extremes. When both the Tick index and the Stochastics are used to day trade the same futures contract...they confirm each other, taking you, the trader, where you want to go. These work well for day trading but for night trading the Tick index is not available.

Barbara Cohen CIO, Shadowtraders, and professional day trader, specializes in teaching students how they can be trading futures with their own trading system and trading strategies. Ms. Cohen has helped hundreds of traders achieve their goals trading. Find out if trading futures is for you by attending one of Ms. Cohen’s Free Webinars. Check out my Futures Trading Articles. For more information, send an email to shadowsupport@shadowtraders.com or call 866-617-2037 today.

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© 2011 Pure Reason, LLC. All Rights Reserved

Testimonials disclosure. Unique experiences and past performances do not guarantee future results! Testimonials herein are unsolicited and are non-representative of all clients; certain accounts may have worse performance than that indicated. Trading Futures involves substantial risk and there is always the potential for loss. Your trading results may vary. Because the risk factor is high in Futures trading, only genuine "risk" funds should be used in such trading. If you do not have the extra capital that you can afford to lose, you should not trade Futures. No "safe" trading system has ever been devised, and no one can guarantee profits or freedom from loss.

THIS INFORMATION IS PROVIDED FOR EDUCATIONAL/ INFORMATIONAL PURPOSES ONLY. These results are not indicative of, and have no bearing on, any individual results that may be attained by the using these indicators in the future.

PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. The example shown here may or may not be typical of the performance of this system and, ALTHOUGH WE BELIEVE THIS INFORMATION TO BE ACCURATE. Potential traders should carefully investigate, evaluate and compare trading strategies before investing capital. Some or all trading strategies may involve an inappropriate level of risk for potential traders. It is the nature of commodity and securities trading that where there is the opportunity for profit, there is also the risk of loss.

Trading strategies, like any other, may involve an inappropriate level of risk for prospective investors. THE RISK OF LOSS IN TRADING COMMODITY FUTURES AND OPTIONS CAN BE SUBSTANTIAL AND MAY NOT BE SUITABLE FOR ALL INVESTORS. Prior to purchasing or leasing a trading strategies from this or any other system vendor or investing in a trading strategies, investors need to carefully consider whether such trading is suitable for them in light of their own specific financial condition. In some cases, futures accounts are subject to substantial charges for commission, management, incentive or advisory fees. It may be necessary for accounts subject to these charges to make substantial trading profits to avoid depletion or exhaustion of their assets..

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