TICK Definition
You wrote: "The tick is a running summation of the number of uptics minus the down ticks, a given stock may have ten downtics in a row that will subtract from the then current number 10."
In the context of the discussion, i.e. the NASDAQ and the NYSE indices, TICK is a sampled function and not cumulative. At fixed intervals during market hours, each stock in the index is sampled to determine whether it upticked, downticked, or was unchanged on the last trade. The reported TICK is the difference between all stocks on a uptick and all stocks on a downtick on their last trade. (The calculation ignores unchanged stocks.)
This is an important distinction. Were TICK cumulative for each stock in the index, the most actively traded, trending stocks would dominate the metric. As it is, each stock has an equal weighting in the TICK. Thus it is a measure of the price trend in the broader market and not issue or volume influenced.
Were TICK cumulative, one-minute and five-minute TICK charts would appear much differently than they do. As the TICK remained positive at, say, +250 average for fifteen minutes, the total would trend up and and out of the normal -1000 to +1000 range. At the least, large trends would develop in the trace that would stray far from the zero line on some days.
The sample interval for the Quote.com $TICK chart, which is used by Astrikos, is slightly less than 15 seconds. Five-minute charts are constructed by saving the first, last, high, and low TICKs in a five-minute period and plotting those values in a bar. I do not know the sample interval Reuters uses, who is apparently Yahoo!'s real-time data provider.
I hope this information is useful for those who asked for a description of TICK.
Refs:
1. See TICK at stockcharts.com
2. See Tick Indicator at biz.yahoo.com |
