Q.O.D June 11
QOD: I have a NYSE $TICK chart indicator on my platform but not sure how best to use it. Any advice for a novice index trader?
You touched on a topic and dashboard indicator near and dear to me. It caters to assist in getting the best entry and exit possible as well as allowing you to keep in a trade via a trailer where one would normally exit. In the figure below, I attached a snapshot of a $TICK chart using Tradestation. Notice I have three lines placed at the zero line, +400 and -400. I used these areas to create a ‘sandbox’ for which the indicator can possibly show my entry or exits. For example, if I have a strategy that is giving me a long signal, I’d prefer to have the $TICK go to the area between 0 and -400. What this does is forces me to be patient and buy the pullback. The opposite 0 and +400 area would be my short should a short signal occur on one of my strategies. One may have to adjust these boxes during extreme trend days. If the $TICK is making continuous extreme readings in the +600 area during a strong market with weak pullbacks, then my buy range or sandbox may have to adjust to a 0 to -200 area. Seeing where the reading found prior support or resistance is also helpful.
Most importantly, the $TICK chart is an extremely valuable dashboard tool, just like the odometer in your car. However, the odometer doesn’t drive your car….you do. Use the $TICK to get a more optimal entry or exit only on setups that occur within your defined trading plan. Using it as a strategy could be costly and prompt overtrading. As always with any indicator or strategy, get familiar with it in simulation and let me know your experience on the ever-so intriguing $TICK chart.
