Teaching a new trader how to use the essential market trading indicator (TICK)

In this video Senior Trader Ryan helps a developing trader go over a trade in $SPY using the $TICK indicator. Ryan breaks down in detail what TICK is and how you can use it to make better trade decisions, get better trade entries, and gauge overall momentum in the market. If you want to add this essential trading indicator to your trading. you won’t want to miss this video.

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good afternoon my name is ryan trost i’m
here at smb capital
and today we are going to go over a
trade in the spies
using tick that one of the trainees put
on we’re going to go over what tick is
how you can use it to make a better
trade decision how you can get better
trade location and kind of gauge overall
momentum in the market
using this indicator
we are going to talk a little bit about
a specific setup in spy today
um that actually happened on monday and
you know the thesis for the entire trade
was using
an indicator called the NYSE tick in
order to
effectively time an exhaustion point to
the upside and the spies to set up a
short setup
so we’re going to go over a little bit
about what tick is how we can
potentially use it
to add edge to our pullback trend
and as a way to evaluate how the
market’s moving under the surface
um so james go ahead kick us off
alrighty so
like ryan said this was on monday uh
was just coming off the macro landscape
of the
news breaking with pfizer uh efficacy of
vaccine uh the vix was sitting at 23.9
and the vaccine news it was good very
very good news for the vaccine but we
were still a ways away from deploying it
there’s a long way from where we are
today and uh
actually having a real impact on the
looking at the big picture this was that
day this was after the most of the
session had come through so these
overnight highs
were the highs of that day so very very
strong strong range
in the overnight session and uh above
average volume
contextually we were sitting about 400
handles up
from top to bottom from this low here
that’s a very very
uh extended move and
something in the morning that was going
through the back of my head while this
being prepared was if i was long already
in this trade
which a lot of people were is this a
good place
to take profit if i was long and i saw
this what would i be thinking
with this kind of a euphoric 15-minute
candle in the uh
overnight session now
the actual key uh kind of trade setup
here if we’re looking at it i was
watching these
these references as we pushed into
all-time highs
and essentially for the bullish thesis
to remain
as we were coming up into here into the
us cash open
would be that we’d have to retain this
primary uh inflection
any acceptance below this was then going
to open
the uh the possibility for continued
as we push into this lower edge and
probe lower so that was kind of the
thesis coming into the morning
and what we were looking for and then
here was the actual session
one of the things i had mentioned in the
morning meeting was that i was going to
be looking for
multiple failed attempts for dip buying
and and and at the open that’s kind of
what we started to see here with with
this very strong selling into the free
and then obviously many failed uh dip
buying events
into the actual first few minutes uh and
the trade truly set up for me once we
had this more capitulatory move lower
and started to get these beautiful
retests back
into that inflection that we were
that i mentioned earlier on the profiles
can you mention um
what the time frame is for this chart
are you on a one minute five minute
these are uh three thousand volume bars
so each candle is going to be three
uh contracts traded in the s p 500
e-mini future
great so just to jump in really quick a
lot of people you know dr s talks about
this a lot
um you effectively make your own bars
based off of whatever type of evaluation
you’re looking to do
some people like to use one minute
candlesticks one five minute et cetera
et cetera
but a lot of people move down to tick
charts as well to get even lower time
and then the other way to do it a lot of
people who trade you know market profile
volume profile they like to build out
their own type of volume bars
and this is done as james is saying you
classify okay this bar is not going to
close until
we see a certain amount of volume done
um during this
this developing bar so as soon as it for
his as soon as it does 3 000 shares of
the futures contracts we’re going to
move on to the next bar and it’s a
little bit of a different way to
chart patterns and things like that but
it’s a way to see what’s going on under
the surface and
especially if you’re trading the spas
and and trading the indices it’s always
better to
build out contextually what’s going on
volume drives price
and a lot of the times if you’re just
trading normal you know candlestick
the spas have a tendency to wick above
previous highs stop out previous lows
and have a lot of noise so you know
effectively what he’s doing here which
is similar to what i do is
looking at volume looking at how volume
is distributing over time and
over price and using that as a way to
formulate your edge as opposed to
just simply trading off technical chart
patterns if you want to learn
three more real world setups that our
traders use including the simple setup
that we teach
all of our new traders and the setup
that turned one of our traders into a
figure big money earner check out the
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of hours from this trading workshop
than from years of online education so
another kind of key moment we’ll run
into here afterwards is
is viewing how this ran up in the
overnight session
and then how this this moved lower so
something that these volume bars just to
add on to what you’re saying can help
is that you can visualize the amount of
volume that’s going into these moves
simply based off of the amount of bars
that are being printed so
a move with more bars is going to be a
higher volume move than one with less
and so that’s kind of a different way of
viewing it than a standard
volume histogram but the way that this
this trade ended up playing out is that
there were kind of a few
key moments within it and
obviously these were the the two primary
entry points
these were two areas that you needed to
prepared to get into this and and ready
to execute because there was
a split second you had to actually get
into these areas you can see the down
candle on this one is
very very quick meaning it was very very
low volume
on the way down because we just popped
up and immediately had
extreme selling on the on the tape there
and you also saw us we’ll go into with
the tick that you had these extreme
ticks that then started to subside
but as far as trade management goes
there was a large
waiting period down here we just were
holding holding holding
and this was kind of my final
destination for that trade
so if you were into this short then this
was definitely a good place to to pay
out some profits and then hold that core
position in for the
last push lower do you have a time stamp
on that move down there uh the one down
there i can pull it up when we when we
look in the tape
it looks to me it probably is
correlating with what i’m looking at
it’s like almost 10 o’clock
yeah 1004 10 yeah at 10 o’clock so
you know as you’re looking to build that
out so you were using simply
these volume bars do you have another
chart up with you know v-laps
any moving averages are you just simply
trying to follow the volume
i have a whole lot of charts up here and
i want to go over some of this
well i’m just saying interestingly
enough off that first failure
that period where you’re saying we’re
spending a lot of time and it’s looking
like they’re doing a lot of volume
trying to
can’t really push us low or just kind of
consolidating that is roughly the
view app in the 24 hour session in the
futures as well so it does make sense
that we would bounce there a little bit
but the more interesting setup which is
what we really want to go over here i
think is
that next bounce that comes up that
second red arrow that you have
is where we see an actual really solid
tick fade setup
so do you have a a chart with this
and the tick setup yeah it’s just fun
so let’s take a quick peek at this
and just for context the main gray bar
there is going to be your positive
negative 600 the gray line is your zero
and then the up and lower bounds or a
thousand negative a thousand
great now let’s dive into a little bit
about what we’re looking for in these
scenarios all right so now we’re looking
at the same day
this is just a one minute normal
candlestick chart so you can see it’s
very similar
in structure to what you were seeing on
that volume bar
chart that he had set up but the only
difference here obviously is you know we
just have volume on the bottom
and these are just time-based candles as
opposed to volume-based candles
but just to highlight just to catch us
back up fill the gap here
this is his original arrow
and this is his second arrow so this is
the period he was talking about where it
looked like buyers were trying to who
by the dip on a strong gap up you can
see we fail
off of that we come down and this is
we’re starting to pay attention to the
ticks here we have a really strong
distribution of the ticks
so effectively what we’re looking for
just to give a little bit more context
is when we’re trading and looking at the
nicey tick
this is basically how many stocks are
currently on an uptick
and how many stocks are currently on a
downtick when that number is positive
more stocks are trading on upticks and
when it’s negative more stocks are
trading on downticks
anytime we have strong ticks holding
above 400 holding above 500 600
that’s when you start to notice that
institutional participants
could be buying basket stocks when you
have six
seven eight hundred those really large
numbers that’s when you see okay
the only people who can make this many
stocks at one time
hit up ticks are institutional
participants who could be buying basket
so anytime we have ticks kind of
meandering between the positive and
negative 400 area
kind of in these zones that’s indicative
some type of backwards price act back
and forth price action
you know consolidations things like that
there’s not really any directionality
getting put to work
you know no big large basket buying
programs are getting put in no big
selling programs coming in
and you know when you look at the price
and look at what’s price actually doing
you do see that it makes sense where
we’re not seeing any big types of buying
or selling
thus we have its consolidation in price
and i should say this isn’t always
you know a final indicator of what’s
happening under the surface
but it can provide edge to make a little
bit more sense of what’s going on with
so when we look at these two symbols
this is where his first arrow was
you know we’re looking right here and
then the second arrow was right here let
me get rid of these bubbles so we can
see the candles a little bit better
we get the breakdown we come down and he
had kind of built out the reference area
like this
he had said okay i’m going to use this
as my reference area
where they originally tried to buy the
dip and as soon as they break down
any re-tests of those breakdown points
technically speaking could be good
opportunities to get short
that’s great you know in any type of
normal in place stock you’d be looking
to try and short this breakdown period
maybe you’d give the stop up to here
maybe you’d stop out even if the top is
but when we’re trading the spies we’re
looking to get a little bit better
execution and trade
location is extremely important and the
way that we can get better trade
location is by using the tick
so anytime we get these big six seven
eight hundred ticks
all the way up here they can be
indicative of exhaustion
and price they’re buying buying buying
stocks buying stocks buying stocks but
they can’t get price higher
they can’t take out previous swing lows
they can’t rebid us
into areas of value and even though
they’re buying
large amounts of stocks you know using
programs or et cetera
they really can’t push price up that’s
exactly what a tick fade exhaustion
setup looks like
so that’s the first one we get a retest
even if you didn’t have the tick right
like even if we blocked all this out
you might be the person who would still
short this just because it’s a technical
so that’s one way to do it but where we
really start to see the tick come into
and allow us to have a little bit more
edge to either not get out of our short
or even re-short is this instance right
and this is the one i really want to
highlight because this is the first time
you actually see
a very solid play based off the tick
we got the breakdown to view app
couldn’t really get negative ticks
but then you start to see the structure
come up like this where
you know we’re building up we’re
building up we’re building up we’re kind
of bouncing off of voab nicely
and then you get kind of a wide range
one minute bar that pushes right up to
these previous invalidation points
as we’re pushing up to those points you
see the ticks hitting
extremes on the day you know normally i
would say
this right here off the open we’re going
to block that out in the first five six
seven eight minutes
especially if you’re using think or swim
these tick values can be skewed
and they’re not necessarily always going
to be very accurate they’re usually
based off the gap
you know if you have a big gap up
they’re going to have very high values
if you’ve a big gap down they’re going
to be very low values
but after the first 10 minutes you can
see it start to normalize
and then once it normalizes then after
the first 10 15 minutes or so you could
use it as a really solid indicator
so as we’re bouncing back up we get a
wide range bar right into the previous
breakdown point
previous failure point and on that we
get a big exhaustion type
tick 800 850 which is indicative of
later on you could see even the thousand
ticks are good
you know if you look up here
you see big 600 plus ticks being used as
areas where buyers just can’t get it
done anymore and we fade
even here buyers can’t get it done and
we fade
and even here buyers can’t get it done
and we fade the important thing to
recognize is
just because we’re getting these extreme
ticks and that might be an area where
sellers are going to step in off of
exhaustion does not mean that there is a
trade there and does not mean that
there’s a bigger pattern
where it really starts to become a
powerful trading indicator
is when you use it in correlation with
other things
so in this example right as we’re
shorting up here we see
previous failure point previous
breakdown point
the 50 retracement in the futures which
can often act as resistance on down
selling days
this entire reference area here
and that’s kind of how you set up a
really nice opportunity to use the tick
as an exhaustion mechanism to get short
and then you kind of hold and then
you’re looking for
honestly you’re kind of just following
price normally you’d look to see if you
get some type of momentum shift to the
downside in the ticks where
you know we get this upside value tick
we come back down
and then we start to see some better
negative ticks that would be a better
for you know a more aggressive failure
but because we’re above view app we have
this really strong gap
it does make sense if you think about it
to not see you know a real large
breakdown come
initially from this it’s likely we’re
going to need to consolidate a little
bit more
let the sellers kind of build up the
steam trap some buyers potentially
before we get the bigger move which
doesn’t really happen
until later in the afternoon but you can
as we start to move we kind of bounce
back up
the ticks distribute more to the
positive side you know the ticks are
distributing positive basically
throughout this entire consolidation
maybe getting some people long
maybe making some people sweat out their
shorts a little bit still holding the 50
retracement of the day then when we
start to roll over
especially on the clothes you can see
some real directionality comes into the
well if you look at the clothes and the
ticks you can see we’re seeing new
consistently you know new tickles get
put in especially on the clothes we’re
seeing real negative
sustained downside values that’s when
you start to see
sustained momentum so tick is really
just an indicator for
is momentum speeding up is momentum
slowing use it in correlation with price
and you can see those things kind of
come together
momentum was kind of strong in this
little up move and then the momentum
when they exhaust themselves buying a
little bit too much
so initially can feel kind of
counter-intuitive you know when i
went over this early on with the
previous class we saw a lot of times
they’d say oh we’re we know we have six
seven hundred ticks doesn’t that mean
real buyers are stepping in how come
we’re not going higher and how come
we’re not continuing to go higher
well all momentum eventually comes to an
end with some type of exhaustion
things like that or we stall out so you
can see situations like this
you know as we’re kind of consolidating
consolidating you can see they’re trying
to push us higher and they can’t trying
to push us higher and they can’t
and then price continues to move lower
and that’s when tick once you kind of
get that invalidation and we
exhaust it makes sense to not think too
hard into these individual upwicks
unless you’re like a hyper scalper it’s
really hard to do in the spies because
obviously the order flows just all over
the place
but if you use tick at inflection areas
as a way to gauge exhaustion that’s when
you can have really good edge
and you know kind of iron out your trade
trade location in order to have better
risk reward on your setups
okay let’s bounce right back into your
yeah i just had one question is there
ever a point where
tick divergence is significant relative
to other swings
absolutely and i think it happens um
there’s certain times when it happens
and if you
look for it here’s what i’ll say if you
look for it too much that’s when you can
run into a little bit of trouble
there are often times where you’ll see a
little bit of
a tick divergence and in your head
you’ll be like like oh
you know they made a new low or they
didn’t make a new low in the spies but
they made a new low in the tick which
they were selling even more stocks to
the downside but they couldn’t bring us
to a new low
maybe maybe that’s an opportunity right
here here’s actually
a pretty good example of a tick
divergence right here that we could use
while it may not have been in any
important inflection areas
let’s look at how this sets up right so
this is from
i think this is tuesday now we’ll be
jumping around a little bit
yeah this looks like tuesday’s session
so we’re coming we’re trading above view
we collapse underneath view app you know
we kind of are coming
back into this trend and as we come down
we put in a big tick low negative 800
sign of exhaustion we we kind of
put that tick in we bounce shallowly but
then we’re making new lows so as they’re
making new lows in the spies
you know price and the spies is now
making new lows for the afternoon
but as that’s happening they can’t get
more and more stocks to go sell you know
they’re selling less and less stocks
as they’re making new lows and spies
that could be indicative of
under the surface this is just a stop
run this is just a low being put in
that’s going to spoof
stop run et cetera whatever you want to
call it this can be a way to recognize
that in real time and be like okay we’re
making new lows in the spies
on decent volume is this some type of
run to get out everybody who tried to
buy the shallow pole in from viewab
or tried to buy the 50 retracement and
you could see that playing
out in real time as very quickly you
know almost
five six minutes later we get a new tick
from you know if you start you know
start the track right here from the
we break down this is a new tick high
from when we broke down and then you
start to see a very obvious momentum
we got big tick lows they come up make a
new tick high
and then you can see for the entirety of
this move right here
as spy’s trading above v right back to
that breakdown point
we’re getting solid positive tick
distribution which is signs of a
momentum shift
off of a tick um divergence so that’s a
very quick example of it
definitely tradable if you were around
for it you know it doesn’t always
make sense and it’s not always very
prudent to start looking for these all
over the place
all right so i just pulled up this is
actually that trade you were just
talking about one thing i’m already
learning just from what we’ve talked
about is i need to get tick to be a lot
bigger because right now i’m running it
relatively small but i just wanted to
kind of bring up the fact of how quickly
this trade took place so we’ll just
start playing it here as we run into
this inflection
and you can start to see those are sales
below the uh
bid the the dark red ones there is this
the first
you know when you you mark the two
arrows that had the short setups this is
the first of it
this one is uh here
the first arrow was this first pullback
on this
got it yeah you can skip as far to what
you were going to show
oh okay um so that was just going to be
i think that’s just because i think
that’s the better setup
i just for me i don’t usually short that
first initial test of a breakdown point
especially you know judging off the
overnight strength i think that’s a
little bit of a tougher trade
obviously it ends up working and you
know it looks really clean in after
but just because as we are retesting
that you don’t really necessarily know
where it’s going to go
they could stretch it all the way to the
top of that consolidation it could be a
false breakdown
so it’s a little easier to let it prove
itself let it trade and make new lows
all the way to v web and then short the
bounce off of the uf
okay now following on with just how i’m
using tick
is there a way because this sequence
that followed up
or is it right around
here when it starts to consolidate and
consolidate and consolidate
is there a way i can leverage tick to
essentially build conviction to keep a
trade on
sure the way that you would do that is
if you really want to dive into it
for me because i don’t really like to
overthink my trades you know i put the
execution on
from good trade location i have a target
in mind and everything that happens in
the middle of that is normally just
noise and i’m trying
you know sure i like to watch and make
sure that we’re not you know making
higher lows or making
um you know consolidations breaking
higher consistently or ticks aren’t
you know completely unable to make lows
if you’re seeing those things that can
invalidate your trade in real time maybe
you take a little bit of risk off
i don’t usually nitpick my positions
that much
i usually in this situation would be
looking for a view at breakdown
but in terms of using the tick to try
and evaluate how your position stands
i would say yes as we start to
consolidate off of that low being made
and you’re watching the ticks you can
see that you know if you pulled it up
even as we’re getting you know four or
500 ticks getting put in which
you know is decent buying not really
sustained buying but it’s okay
as that’s happening price isn’t moving
at all you know we couldn’t even get
back above 36.20
in the futures and then even when we put
in another 600 tick
um we put in that 600 tick and then we
can’t even make a higher high you know
we make that lower high
right around um 36 26.50 which is looks
like is the candle that’s being put in
right now on what we’re looking at yeah
this was that that
squeeze point on that trade yeah so if
you click play this will probably play
on that lower high
as you can see they’re buying buying
buying the tick is starting the tick
grows all the way up to 600 on this move
see it’s stalling a little bit in the
40s can’t really push up to the 50 cent
flirting with it you know it was about
50 cents for just a second
you can kind of see the tape’s really
kind of sticking up there in the 40s
and boom we’re rejecting right back into
the 30s
seeing what it can do
so you know if you’re short from that
previous swing high a little bit to the
left of this current developing move
as you start to see this fail you know
we couldn’t really get back above 50
you know you were short from the top of
that wick if you were trading off of
that big exhaustion tick
as you start to see okay we just got
another 600 tick
of basket buying and they made another
lower high that’s kind of confirmation
and then any consolidations based off of
that you’re just holding
i wouldn’t think into it anymore as soon
as they make that next lower high
you can say okay i can probably set this
to even break even it looks like we’re
going to consolidate
any breakdown from that v web point
or from that previous swing low at 10
o’clock that we originally targeted
any breakdowns from there maybe i start
taking off a little bit of risk if i see
negative 600 ticks any exhaustions to
the downside
yeah this was that point where you can
see the tick really kind of
capitulated push lower and you finally
started to test that zero line again
yeah exactly and then it comes back to
zero and just kind of is
you know moving between positive 300
negative 300
you know consolidation type move and
then you get a negative 400 tick that
breaks us down
then we kind of come back up and we’re
putting positive ticks in again but we
can’t get back above the view app in the
and then you start to see obviously this
is ahead of where we’re looking on the
on the current video but that’s how this
ends up playing out we kind of come down
we consolidate a little bit then we end
up breaking that swing low
and this whole time the ticks even when
they put it in positive 600s aren’t able
to bring price any higher
okay i was also curious if you could uh
what you think some of the common
pitfalls or fallacies are
when using tick yeah 100 so these days
that we’re targeting right now and we’re
looking at are obviously really good
examples of when it works
but there are also examples of where it
can run you into a little bit of trouble
and that usually happens on trend days
on trend days you will have these big
thousand ticks get put in
or big five six seven hundred ticks
even though they’re putting in
exhaustion type ticks you are not
getting any type of fades
let me scroll back and see if i can find
the most recent day where we saw some of
it is interesting because in you know
recent times a lot of the moves
have been happening in the overnight
session so we’ve been having a lot of
kind of consolidation-based days here’s
a good one right here
all right so this is all the way back on
the day after the election
um the fourth so early on in the session
we open this is a five minute bars
we kind of compress and break higher
every one of these little yellow dots is
when a thousand tick gets put in
but you can see normally you know if
we’re thinking about fading
some type of directionality a big
thousand tick can be when momentum slows
but on this day we see sustained ticks
above 600
ticks holding ticks holding ticks
holding ticks holding
even when they wick it back down the
ticks come right back up into really
sustained basket buying
and even after this thousand tick we
continue to push higher push higher push
we put in all these exhausted tight
moves but then we just consolidate and
continue to move higher so that’s when
it can be a little bit of a fallacy i
think i actually even ran into a little
bit of trouble on this day
because you get those big thousand ticks
what could potentially be resistance
obviously we have you know sellers could
step in anywhere along this uptrend
especially after the election
because we still at this time didn’t
know you know really who was going to
win yet
you know people are stepping in doing
this that the other thing
you see these thousand ticks not being
faded it’s very easy to get caught
either selling or long too early
because you think this is exhaustion
move or trying to short because you
think that
the market’s exhausted off of these
thousand ticks so this first one gets
put in if you short
you know 340 4440
in the spies you know it ends up moving
another two dollars
in you know less than 10 minutes just
based off of how strong this buying was
up here
so that’s when you can run into a little
bit of troubles on trend up days and
trend down days
if the ticks are you know vastly
distributing to one side
it usually is better to just use price
action and obviously
not really step in front of a moving
train okay and are there
ever situations where you’re going to
see extreme extreme
negative ticks hold and hold and holding
but price just keeps chugging higher
hmm interesting i i haven’t seen a
divergence that
that crazy before um where you know
price is going up but we’re holding
negative ticks
if that happens it would probably be
there’s some type of
significant divergence across the
indices like maybe they’re selling a
bunch of small caps or selling
big caps but no i haven’t really seen
grind higher as we are seeing negative
ticks in the current volatility
maybe back when the vix was like you
know sub 15 the market would just kind
grind higher but they’re you know
they’re selling certain stocks under the
um it’s tough to say i don’t think i’ve
ever seen a
divergence that bad that doesn’t correct
itself very quickly
gotcha and when the volatility does
increase like it did say back in
march do your levels of what is
considered an extreme then shift
so it’s like in a thousand tick now
supposed to be a 2000 tick or how does
no well i think the highest ticks i’ve
seen maybe in my career is like 1650 or
i think when the pandemic first started
i think we saw like a big
downside tick like that like if i went
to a daily
you know these ticks down here negative
i don’t think this these ticks down here
are false prints obviously you can see
that those aren’t real on this day
the first day off the top it looks like
we saw you know obviously we v-bottomed
and then in june it looks like we saw
a pretty serious negative tick this may
have been one of the biggest negative
ticks in recent history
but obviously coming off the lows we
would have days where
you know we would have negative this day
we had a negative 1500 tick but then we
also had a positive 1 500 tick
and obviously that was a very crazy
volatility environment so in those
situations yes you have to be careful
think that you know adjusting one your
sizing and you know that’s a whole
nother story you adjust your size to the
volatility environment
but even as you know for an example
as we’ve been talking we’ve seen the
market put in a low
breakdown and look we put in a thousand
tick down here at 12.46
but even then the market is sustaining
these negative ticks and selling us
lower and lower lower
and then as soon as we pop back up we
actually put in a big negative tick
today this negative tick gets put in
we bounce and then do we put in a higher
low with this exhaustion tick
you know we’re starting to see the ticks
start to distribute a little bit less
you know maybe we get a big move back
above the overnight low that has like a
4 500 tick but right now you can see
we’re very distributed to the downside
ever since we broke down from view app
up here
so you know it’s a nuanced thing you
don’t want to get to the point where
you’re it’s your soul mechanism you know
you’re doing everything off of tick like
if a tick gets put in like this
often negatives like oh i have to be
short here i have to be short here still
build out your inflections
still look to only trade from really
good trade location but if you know
this is the difference between us
talking about all right if price gets to
50 cent band in the spies where am i
going to put my risk on am i going to
you know start at the beginning of that
zone or am i going to wait to the back
using tick can help you get better trade
location and obviously the better your
trade location
the better your wrist reward and that’s
the entire purpose of using
an indicator like the tick you know
obviously there’s merit to
using it to kind of figure out momentum
situations you know
as we’re consolidating here selling
selling selling but as soon as we kind
we see these positive ticks get put in
and the ticks start to shift momentum
early this morning even before we’ve
broken out of this consolidation
we get this first positive tick even
before we’ve taken out the consolidation
see more ticks more ticks more ticks
more ticks more ticks and then right
this isn’t until 10 12 that we actually
start to take out the highs we’ve
already had distributed positive ticks
so it can be a little bit of a leading
indicator in those instances
but not always and it’s something that
takes practice to read and you don’t
want to get too caught up
you know watching tick by tick on a one
minute chart using it around your major
inflections that are built off of
you know volume profile or you know
whatever type of
way you have to build out your own
levels using it around those inflections
is the way to really have
you know solid edge gotcha so it’s
definitely lower on the hierarchy
relative to
context yeah yeah yeah you go you go
your levels obviously intraday price
um and then on under the surface you
know you can go under the hood to see
how things are developing is when i use
things like the advanced decline line
um and the nicey tick to try and gauge
momentum situations gauge who’s in
time my executions a little bit better
the ad line’s a little bit better for
kind of
looking at underlying momentum is this a
rotationary environment is everything
kind of moving together
it’s all about building that bigger
picture when eventually you come down to
actually executing your trade ideas
will you ever change like the size of
your trade
or how you how much you’re willing to
risk on a trade relative to
if the lower those lower tools are going
to be confluent or dissident with your
um usually no if anything i’ll
hold more size if it looks better if it
doesn’t look bad
often like if it looks bad like let’s
say you know the ad line is
not making highs as we’re making highs
and there’s a little bit of a divergence
you really want to watch in real time
and be like are they going to take this
divergence out is this divergence just
because iwm is not as strong
you do have to make sure that every
situation is not going to be the same
and it’s not always going to be
playing out exactly how you expect so
you have to make sure that
in real time you’re doing everything top
to bottom
how are we on the hourly how are you how
are we down on a five minute one minute
then how are we on the internals putting
all that together is the way that you
can really start to make
a strong evaluation of what’s going on i
don’t usually
change my sizing based off of the market
internals i usually trade change my
sizing based off of what’s happening
on higher time frames like as in today
i didn’t make any trades today because
you know i wanted to short this
i was kind of talking about that in the
11am meeting i was trying to short this
but it didn’t quite peak up to where i
wanted it from
but even then today you know i would
have been a little bit smaller size on
this just because we’re in a
type environment but then as soon as we
break lows and we start to expand the
range a little bit
you start to press it and maybe you you
think about you know are we going to go
a little bit lower are we going to go
all the way to 3500 or 3505
maybe you start to size up as the ranges
but then again you know the range is
expanding sizes you up automatically so
you have to make sure that you’re
keeping track of both of those things in
real time
would be interesting to see if we didn’t
bounce from right here
you know as we put in these you can
start to see the situation developing
you know is this going to be a higher
low that gets put in or are we going to
more sustained negative thousand ticks
that even bring us to a new low
i don’t have my levels up on this chart
so i don’t really have that good of an
idea of where we are
yeah that morning sequence with the tick
holding below the zero line and then
breaking above is almost that leading
indicator that was a really interesting
sequence for someone
who’s new to the tick and i didn’t know
if that was something that was
repeatable or common
in seeing it what i’ll say is you’ll see
repeatable patterns all over the place
and they don’t always
you know do the same things there’s
always going to be different scenarios
that happen
i basically was thinking
that we were going to get some type of
6 800 tick on this low that would have
set up an exhaustion trade
to trade back towards the top of the
range but since we didn’t get that
and you know we’re holding negative
ticks but they can’t push us lower they
can’t push us lower they can’t push us
lower as i started to see that i was
like all right we’re probably going to
go up
i don’t think there’s a long set up here
because i don’t like risking this weak
low i don’t like risking
here either i think the real risk is the
overnight low
we’re a little bit too far away from
that risk reward wise because i don’t
think we’re going to go right to the
overnight high unless the momentum
situation really starts to change
so in that situation yeah it was a
little bit unique to see negative ticks
as we’re not really selling off
but that tells you okay maybe we need to
go higher
for sellers to really get it done or
buyers are
willing to buy here and we’re getting
acceptance and we’re gonna we need to
push higher
and see how they manage the situation
but it would be interesting to see
whether or not that’s not a high or low
on the day’s time frame even though i
my levels are basically
like right here to
that’s kind of the inflection area i
have looks like it wicked below it a
little bit
so we’ll see if we can kind of stabilize
here and push back up or if we’re going
to continue to roll and trend into the
um but i think that’s we basically
covered everything i don’t want to
you know have this go on for too long
we’ve gone over a lot with the tick
thank you for putting that together for
me and i hope everybody learned
a little bit more about using some
market indicators about what’s going on
under the surface in order to make
stronger trade decisions in the spies
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