TICK & TRIN

Does anyone use these indicators?

According to John Carter @ SFOMagazine rules for TICK are:

Between -400 and +400: market consolidating/noise

When short and TICK > +800: cover
When long and TICK < -800: cover

When short and TICK < -1000: cover
When long and TICK > +1000: cover

Constant + and peaks over +1000: strong uptrend
Constant - and drops below -1000: strong downtrend

More info: http://www.sfomag.com/articledetail.asp?ID=635803948&MonthNameID=August&YearID=2005

Does anyone have a set of rules for TRIN?

Which TICK and TRIN do you use for which contracts?

what John Carter and his partner Hubert Senters teach is that its the direction of the trin that counts which works broadly speaking in an adverse direction to the underlying index. As for tics they use +1k and -1k to fade the market depending on the time of day and depending on other indicators
but then you filter in if the mkt is banging on +1k tics what you look for is the pullback in tics and then look for the hook back up to then enter in the direction of the mkt which presumably because it was + means long.

One thing which I watch is where the NYSE TICK is relative to its day's range. I have an indicator (TimerA1) which allows me to set that absolute value (e.g. 1000 or 800 - this prevents signals when the values are low and we are within a certain percent of the day's extremes such as at the beginning of the day.) and then I set the percentage within the extreme that I want it to signal/alarm. It puts a dot on the chart but also makes an audible alarm which allows me to focus on other factors on the market and I can then hear the audible alarm and know that the NYSE TICK is within one of its extremes which gives me a heads-up.

I used to find that I would miss the NYSE TICK movements that interested me because it was difficult to watch so many charts at the same time, that's why I came up with this.

Using a signal when the NYSE TICK is a certain percent from its day's extremes allows you (or the indicator) to automatically adjust to highly volatile or low range days.

Daytrader. If that were available in tradestation eld format I would find that better value (for me) than using my current method which is just to set alerts as the line is breached at 800

Great info guys.

I'm looking at TICK and TRIN now when daytrading the YM.

It's not so easy but they have an added value.

quote:

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Originally posted by alleyb

Daytrader. If that were available in tradestation eld format I would find that better value (for me) than using my current method which is just to set alerts as the line is breached at 800

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Unfortunately I don't have a TradeStation version. Can TradeStation read eSignal EFS scripts/indicators (yet)? I would imagine that TradeStation would do very well in stealing customers from eSignal if they added that feature to their charting platform.

What time frame are you using on the Tick and Trin charts?

Steve

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Originally posted by drphone

What time frame are you using on the Tick and Trin charts?

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I'm not sure about the TRIN because I don't use it but on the TICK I use a 1 minute chart generally but the relevant data that you are using is looked at tick by tick. The TICK is calculated every 6 seconds on the platform that I use (eSignal) and so you get 10 readings per minute. If you were to generate the TICK in realtime then you would get as many changes per minute as there are changes in all the NYSE stock prices per minute which could be thousands.

I have Tick and CVB charts on CQG. My CVB is set at 233 ticks. Is this what you mean? I can also setup a tick chart. It has a "weight" of .7 and is set for "flat" ticks. Does this help?
Steve

for $TRIN try a 3 or 5 minute line chart. $TRIN is more useful for determining current market sentiment / trend bias, ie. Sell side or Buy side is in control. Look for trends, trendlines, trendline breaks, ect. also remember because of the way $TRIN is calculated, it trends in the opposite direction of the price trend direction.

for $TICK I recommend a 1 minute candle chart. $TICK being based on the NYSE cash market has a long side bias, thus the correct reversal signal levels are -500, zero, + 800 and + 1000. Learn to recognize divergences between $TICK and price for more reliable signals of price reversal.

quote:

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Originally posted by drphone

I have Tick and CVB charts on CQG. My CVB is set at 233 ticks. Is this what you mean? I can also setup a tick chart. It has a "weight" of .7 and is set for "flat" ticks.

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What is a CVB chart? I am not familiar with that...
I am also not familiar with setting a weight on a chart or the concept of "flat" ticks. As you can probably guess I don't use CQG. If you can find out what these terms mean I can interpret it for you.

As far as TICK is concerned you need to understand how it is calculated. The value of TICK is the net number of stocks that have last traded up. In other words, each of the stocks on the NYSE can be in one of 3 states. The current last traded price on the board is (1) above the previous traded price (2) below the previous traded price (3) the same as the previous traded price.

If the figures are:
(1) 700
(2) 300
(3) 450

(Assumes 1,450 listed stocks) Then the value of TICK is 400 (700 - 300).

To calculate that requires a bit of computer power because all 1,450 stocks need to be "watched" for relevant changes. This means that the people and companies that calculate this information don't do it in real-time and instead do it every X seconds. eSignal for example does it ever 6 seconds the last time I checked. CQG may calculate it more or less frequently.

This means that if you are looking at the value of TICK it might be 5 seconds old and when you get a new reading the next second the value has jumped because the market has moved fast in the last 5 seconds.

Depending on your style and method of trading, 5 seconds may or may not be important. Whatever your style, I think that you will agree with me that everyone would rather have the information instantaneously rather than delayed - even if it is for a few seconds.

As computer power and bandwidth increase the time-to-deliver this sort of information should decrease.

You're very welcome. I think that it's important to understand how the indices are calculated or constructed as well as the charts to get an intuitive insight into what you are seeing.

As an analogy: A person with a good grasp of the English language and vocabulary will see more in the text on a page than a person with a lesser or poor understanding of the language. When reading a chart, if you understand the underlying concepts of how that data is constructed you will (1) understand more about what the market is doing and (2) grasp those ideas faster.