Tick Index

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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.

INVESTOPEDIA EXPLAINS '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.

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RELATED FAQS
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    To ensure orderly markets, the New York Stock Exchange (NYSE) has a set of restrictions that it can implement when experiencing ... Read Full Answer >>
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    Both stop orders and limit orders have their advantages and disadvantages; traders need to decide between the two based on ... Read Full Answer >>
  3. How do day traders capture profits from the difference between bid and ask prices?

    Day traders capture profits from the difference between bid and ask prices by scalping stock. Sensing that a stock is going ... Read Full Answer >>
  4. How is buying on margin regulated by the Securities and Exchange Commission (SEC)?

    The Federal Reserve Board and the Financial Industry Regulatory Authority (FINRA) regulate buying on margin to a greater ... Read Full Answer >>
  5. Why is the Vortex Indicator (VI) important for traders and analysts?

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