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NYSE Tick - Why It Should Be Used In Every Trading System

By Edited May 20, 2014 0 0

There are many different trading systems employed by traders for all of the various financial markets. All of which are unique and developed to fit the individuals using them personal preferences. Nevertheless, all of them should have the NYSE tick as a integral segment of their platform when trading stocks, futures or options or they risk not having available crucial market information.

This important indicator provides information on market internals and the overall mood of participants. Most data providers and charting software vendors will provide feeds which allow the NYSE Tick to reside on any trading platform. With this indicator combined with a live chart of the S&P futures, traders have their finger on the pulse of the market and can better determine when to enter and exit trades.

This indicator is simplistic in design but powerful in providing information. With a zero median line in the middle of the chart, it fluctuates above or below this line depending on the market mood. When bulls are in control the chart will show a plus number. For example if the chart is showing +325, then 325 more stocks are ticking up rather than stocks ticking down. On the other side of the coin, if the chart shows -325, there are 325 more stocks ticking down on the NYSE than are ticking up, which indicates the bears are in control.

In some instances, extreme ranges can be a warning. If a trader were using a scalp trading method and were opening and closing many trades throughout the day going long the market, he would not want to enter a long position when the chart is registering extreme overbought conditions. Extreme overbought conditions are present when the chart begins reading +900 or +1000. When this extreme area is registering, odds are good the market is going to pullback and it would not be wise to go long the market with a scalp trade. Scalp traders live by the one minute chart and the +1000 area will happen quite often throughout bullish sessions. This is also true for the opposite when shorting bearish markets and the chart is registering -1000.

Whichever time frame you choose to trade, the NYSE tick is a valuable indicator and should be residing on your trading platform whenever you are playing the financial markets using short term strategies.

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