Tick Index

DEFINITION of 'Tick Index'

The number of stocks trading on an uptick minus the number of stocks trading on a downtick. Tick index is a popular indicator used by day traders to view the overall market sentiment at a given point in time. By being able to easily see the ratio of "up" stocks to "down" stocks, traders can more easily make quick trading decisions that are dependent upon market movement.

BREAKING DOWN 'Tick Index'

A tick index is a very short-term indicator, often only being relevant for a few minutes, if that long. For a trader looking to enter into a bullish environment, a positive tick index is a good indicator of overall market optimism, as more stocks will be trading on an uptick compared to those trading down. That being said, tick indexes are very speculative identifiers of market sentiment at a given point in time, and are considered quite unreliable for trades that do not encompass the short time span.

RELATED TERMS
  1. Minus Tick

    Designates a trade that occurs at a lower price than the immediately ...
  2. Closing Tick

    The difference between the number of stocks that closed higher ...
  3. Zero Minus Tick

    A securities trade executed on an exchange at the same price ...
  4. Tick

    The minimum upward or downward movement in the price of a security. ...
  5. Tick Size

    The minimum price movement of a trading instrument. The price ...
  6. Zero Plus Tick

    A security trade that is executed at the same price as the preceding ...
Related Articles
  1. Trading

    The Uptick Rule: Does It Keep Bear Markets Ticking?

    This rule prevents traders from driving stocks down, but its effect on market volatility is debatable.
  2. ETFs & Mutual Funds

    An Introduction To Stock Market Indices

    Investopedia explains the five most talked about indices and what makes them all different.
  3. Trading

    The Uptick Rule Debate

    This rule was deemed ineffective and repealed in 2007, but critics argue it protects the market from bear raids.
  4. Trading

    Advantages Of Data-Based Intraday Charts

    We take a look at these chart intervals and how we can use them to our advantage.
  5. Trading

    An Introduction To Trading Forex Futures

    We explain what forex futures are, where they are traded, and the tools you need to successfully trade these derivatives.
  6. ETFs & Mutual Funds

    The Pros and Cons of Indexes

    Learn about the advantages and disadvantages of stock indexes and passive index funds. Discover how there is an opportunity cost to using index funds.
  7. Trading

    What The Market Open Tells You

    The first few moments of trading provide a lot of information. If a trader analyzes this information, it can give a lot of insight into the market's moves for the day.
  8. Trading

    Introduction To Momentum Trading

    This trading style offers major profit potential thanks to the powerful way in which momentum can drive a stock.
  9. Trading

    How Much Trading Capital Do Forex Traders Need?

    Even a small pip profit can mean substantial percentage returns over time.
  10. Trading

    Forex Market Sentiment Indicators

    Sentiment Indicators are another tool that can alert traders to extreme conditions.
RELATED FAQS
  1. What is the difference between pips, points, and ticks?

    Learn the differences between points, ticks and pips and how each are used by investors to measure price changes in stocks, ... Read Answer >>
  2. What is a common strategy traders implement when using the Uptick Volume?

    Learn how traders use uptick and downtick volume with VWAP cross to identify trends and momentum and identify points of big ... Read Answer >>
  3. What are the best technical indicators to complement the Uptick Volume?

    See how uptick volume can be used to help confirm price trends from nearly every trend-following indicator, especially when ... Read Answer >>
  4. What is a common strategy traders implement when using the Volatility Ratio?

    Learn how to create a strategy using the volatility ratio with uptick volume and downtick volume to signal reversal of trend ... Read Answer >>
  5. What is the Uptick Volume formula and how is it calculated?

    Learn more about uptick volume, a measurement of the number of trades that take place during a time when an asset's price ... Read Answer >>
  6. Why is the Uptick Volume important for traders and analysts?

    Find out why technical analysts and traders keep track of uptick volume to better assess the momentum of a stock's price ... Read Answer >>
Hot Definitions
  1. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  2. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  3. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  4. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  5. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
  6. Omnibus Account

    An account between two futures merchants (brokers). It involves the transaction of individual accounts which are combined ...
Trading Center