Day Trading Strategies – The Tick and How To Use It

There are literally hundreds of day trading strategies that traders use to gain a short term edge over the market. Several of the best day trading books outlines these strategies in an easy to follow, systematic manner.

However, it’s important to note that many day trading books are written by authors who simply want to sell books. Their day trading strategies have never been tested or applied to the real world. This is why it is best to always be certain that the author of any day trading strategies books has spent many hours in the live markets developing the techniques and strategies presented in the book.

One of my favorite day trading books is Trade Like A Hedge Fund by James Altucher. James is a former hedge fund manager who was trained by one of the top money managers of all time Victor Niederhoffer. James also had extensive experience with hands on day trading prior to writing the above book.

One of the top day trading tips in Altucher’s book is how to use the TICK indicator to gauge intra-day sentiment. Here’s a brief overview.

The TICK indicator represents the number of stocks that have moved upward within the past second minus the number of stocks that have ticked downward during the same second.

A simple example of how to read the tick is if the tick +200, it means that 200 more stocks ticked upward then downward in the past second. The opposite is also true. It the tick reads -200 it means that 200 more stocks have ticked downward over the time frame.

Altucher teaches to buy the QQQQ whenever the tick is minus 50 during any ½ hour price bar and the next ½ hour price bar starts and drops lower than the first ½ hour price bar.

The trade is exited upon a gain of 2%, the TICK hits +400 , or 10 market hours have lapsed since the entry.
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