Do you use tracking of "up" or "down" ticks? (December 2, 2000)
'Ticks' measure whether a stock is trading up or down from its last trade. They are shown as simple plus or minus signs. The basic theory is that you can gauge where a stock is moving or what the immediate trend is by looking at the trend of the ticks. This is also extrapolated from the entire market as well and used as an indicator of which way the market is moving in the very short trend.
When deciding to enter a trade when we have not set a buy stop order at a certain price, we will look at the ticks as a confirmation of the movement. But it is only a secondary confirmation for us. We look at the volume, whether the stock is bouncing up off of support or breaking through resistance, the buy and sell orders on Nasdaq Level II, and the fluctuations in the bid and ask. Primary to us is seeing the stock moving above our target level on decent volume. Then we want to see the buying pressure (if taking a bullish position) in our favor and the bid and ask edging in our direction. If that is happening, the ticks will be there as well. We just put more emphasis on where the stock is and how many people are buying or selling it at that time than on the ticks which give an indication, but don't tell the 'why' behind what is happening.
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