I read again John Carter’s article on TICK. I found it useful and I incorporate it into my trading. It assists me in exiting potentially losing trade or protecting profit. It will reduced the situation like’ I exited the trade earlier because I feel something is not right’.
Here are some points from Carter’s work.
The TICKS (TradeStation symbol $TICK) summarize the number of stocks on the NYSE that are increasing in price versus those that are decreasing in price from the previous price quote. Many times this is not purely buying and selling, as an uptick may only represent that the ask was hit, while a downtick may only represent that a bid was hit.
Any TICK reading that is below +400 or above -400 is noise and should be ignored.
If I?m long intraday, my stop hasn?t been hit, and the markets
generate a -800 TICK reading, I will close out my position at the market. Conversely, if I?m short, the markets generate a TICK reading of +800, and my stop hasn?t been hit, I will close out my position at the market.
If I am long and the markets hit +1000 TICKS, I will use that as a signal to exit the remainder of my position. If I am short and the markets hit -1000 TICKS, I will use that as a signal to exit the remainder of my position.
Something I take into account after 10:30 a.m. EST and watch throughout the day: When the TICKS spend 90 percent of their time above zero with repeated extreme high tick readings, I ignore all day trading short setups and focus on longs. When the TICKS spend 90 percent of their time below zero with repeated extreme low tick readings, I ignore all day trading long setups and focus on shorts.