In today's stock trading lesson we review one of my favorite day trading tactics that tells me when to book quick profits for cash flow, and when to increase my size and hold my winning traders longer.
The NYSE TICK index compares the number of stocks that are rising to the number of stocks that are falling on the New York Stock Exchange (NYSE).
The index measures stocks making an uptick and subtracts stocks making a downtick. For example, if 1,500 stocks have made an uptick and 600 stocks have made a downtick, the tick index would equal +900 (1,500 – 900).
Understanding the Tick Index
The tick index is a popular indicator used by day traders to view the overall market sentiment at a given point in time. Seeing the ratio of "up" stocks to "down" stocks allows traders to make quick trading decisions that are dependent upon market movement.