TICK Vs Advancers - Decliners

[Tradewinds 12]

• uptick - last transaction is at a higher price than the previous transaction.
  

• downtick - last transaction is at a lower price than the previous transaction.
  

• Neutral tick - last transaction is at the same price as the previous one, this is a zero tick.
  

 

An uptick for purposes of calculating the $TICK is a transaction at a higher price. But what is an Advancer? I notice that Advancers and Decliners are talked about in terms of ISSUES. I don't know what the difference is between an uptick for the $TICK and an Advancer. They can't be the same, or an uptick minus a downtick would be the same as an Advancer minus a Decliner. But they are not the same. In fact, the $TICK can be going up while the $ADVN - $DECN is going down.

 

I have searched the internet, but I can't find a definition of what an advancing issue is.

[Tradewinds 12]

I just found some info about Advancers and Decliners that define an Advancer or Decliner as a stock that is trading higher or lower than the previous CLOSE. So I'm wondering if the difference between an uptick and an advancer is whether there was an actual transaction or not. The price of a stock could go higher without any real transaction, that could be an Advancer. So regardless of whether a particular stock was actually bought or sold, the price could change. But with the $TICK, maybe you can not get an uptick unless there was actually a transaction.

 

Can anyone verify this, or refute it? Or provide a reference for clarification?

[Tradewinds 12]

Here is a link to a definition of an uptick:

 

http://www.investopedia.com/terms/u/uptick.asp

[Tradewinds 12]

So if an uptick requires an actual transaction, but an advancer does not require an actual transaction, then an increase in the NYSE $TICK could mean that there is REAL buying going on at a higher price, as opposed to a higher price that no-one was willing to buy. The price could be going up, (advancer) but no-one is willing to buy the higher price (NYSE $TICK going down). Demand at the higher prices is drying up, . . . price peaks.

 

How does that sound for logic? Does that make sense? I'd like to know what people think.

[TimRacette 11]

While the tick is in reference to only last price, advances and decliners relates to whether or not the stock is + or - on the day.

 

Another thing to consider when using the tick is that there are multiple ways to get the same tick reading...

 

For example lets say there is a market with 5 stocks a reading of +2 on the tick could be a result of 2 upticks and 3 unchanged OR 3 upticks, 1 down tick, 1 unchanged tick or 4 upticks and 1 down tick.

 

For this reason I disregard any tick data less than |400| at 600 I pay attention, 800 is cause for possible action and a 1000 reading on the tick results in direct action (at least for my trading strategy).

 

If anyone is using thinkorswim I have some cool code I created to highlight these tick readings and also produce a "ding" when a +1000 or -1000 tick reading is produced. I'd be happy to share that code.

 

~Tim

[Tradewinds 12]

  TimRacette said:

While the tick is in reference to only last price, advances and decliners relates to whether or not the stock is + or - on the day.

 

~Tim

 

Yes, I have seen that definition that you are using. I trade intraday, one minute chart, and the advancers and decliners are different on every bar. One thing I have often seen, is that definitions are given in terms of day to day. But it's really an issue of bar to bar. Otherwise, the $ADVN - $DECN on an intraday chart would be the same value all day long. But it isn't. It changes from minute to minute.

[Tradewinds 12]

  TimRacette said:

Another thing to consider when using the tick is that there are multiple ways to get the same tick reading...

 

For example lets say there is a market with 5 stocks a reading of +2 on the tick could be a result of 2 upticks and 3 unchanged OR 3 upticks, 1 down tick, 1 unchanged tick or 4 upticks and 1 down tick.

 

For this reason I disregard any tick data less than |400| at 600 I pay attention, 800 is cause for possible action and a 1000 reading on the tick results in direct action (at least for my trading strategy).

 

~Tim

 

That's a good point. I'm still not convinced that TICK readings less than 400 should be disregarded though. Personally, I haven't worked through what those lower TICK readings should really mean or not, but I'm leaving some space in my brain cells to be open to some further clarification.

[david22 10]

here's a good website that defines advancers/decliners, up/down volume:

http://www.marketvolume.com/technicalanalysis/adissues.asp

 

 

In regards to advancers vs decliners, its much more accurate to calculate every few

minutes and to take into account the most recent intraday closing price as opposed to last nights

closing price..

 

Description, Advance Stock:

A Stock is considered advanced if it stock price moved up over a minute. No matter where the stock is in relation to the previous day close, if this stock moves up over a minute it is considered as advanced stock.

[Tradewinds 12]

  david22 said:

Description, Advance Stock:

A Stock is considered advanced if it stock price moved up over a minute. No matter where the stock is in relation to the previous day close, if this stock moves up over a minute it is considered as advanced stock.

 

The definition I looked at on that site seemed to state something else.

Edited March 1, 2011 by Tradewinds

[david22 10]

where are you getting your advancer/decliners data from? Tos, esignal, tradestation?

 

because the description i gave on "advance stock" is custom made and not offered by data vendors..

 

just to clarify, all data vendors provide method 1 to calculate advancers/decliners. Method 2 is more custom

and more accurate for intraday trading.

 

1) Advanced Stock using EOD close: A Stock is considered advanced if it traded above the previous day close. Even if the stock is moving during the trading session down, no matter how strong and how long this move down is, if this stock is still above previous day close it is still considered as advanced stock.

 

2) Advance Stock using intraday close:

A Stock is considered advanced if it stock price moved up over a minute. No matter where the stock is in relation to the previous day close, if this stock moves up over a minute it is considered as advanced stock.

Edited March 1, 2011 by david22
additonal info added

[Tradewinds 12]

  david22 said:

because the description i gave on "advance stock" is custom made and not offered by data vendors..

 

Okay, I'm glad you pointed that out.

[Tradewinds 12]

  david22 said:

1) Advanced Stock using EOD close: A Stock is considered advanced if it traded above the previous day close. Even if the stock is moving during the trading session down, no matter how strong and how long this move down is, if this stock is still above previous day close it is still considered as advanced stock.

 

Well, I guess that the Advancers and Decliners are determined by comparing the current price to yesterday's closing price.

 

The point I would like to make, is that Advancers and Decliners don't necessarily mean that anyone is buying or selling at those prices. So a stock may have Advanced in price, but just because it has advanced in price, doesn't mean that people are buying at that price. I guess what I'm saying is, that whoever or whatever controls the price, could be moving the price without people actually buying or selling at that price.

 

I'm trying to figure out the influences and behavior of these market internals. For example, if the Advancers are going up, but actual transactions at the advancing prices are not going up, that is information that I would like to know.

 

To some degree, I think that the Advancers and Decliners represent the price the market is "Asking" for a stock, but it doesn't necessarily mean that anyone is paying that price. It could mean that, it might not mean that.

 

Does anyone know how the exchanges set what the ask and bid is for a stock? I'm assuming that offers get made to buy and sell, all the time, then get canceled. But the market doesn't know those orders are going to get canceled.

 

I've read posts that talk about major institutions entering orders, and then withdrawing them, implying that price could get manipulated by entering orders that they never intend to fill.

[david22 10]

Your right about advancers/decliners not giving any info on buy/sell pressure.

You need to investigate advance/decline volume to assess the pressure.

Other internals are the tick and even a equal weighted index for a basket of stocks.

 

You mention orders gettting cancelled, you could probably study a bit on Level 2 to see how

the orders/withdrawals are played out for experience.

 

Plus you could investigate time and sales (orders that have passed) Vs Level 2 (intentions).

Market delta is a good website to investigate this area..

[Tradewinds 12]

  david22 said:

You need to investigate advance/decline volume to assess the pressure.

 

Is that the same as Up Volume and Down Volume? I chart the Up Volume/Down Volume ratio.

[Tradewinds 12]

I was thinking about whether there is a way to combine TICK data and Advance/Decline data. I don't know if it would have any meaning. The TICK and Advance/Decline data are often synced up. But sometimes they diverge. For example, the TICK will be going up, while the Advancers/Decliners are still going down.

[Tradewinds 12]

  TimRacette said:

For this reason I disregard any tick data less than |400| at 600 I pay attention, 800 is cause for possible action and a 1000 reading on the tick results in direct action (at least for my trading strategy)

 

Those big tick readings, can be interpreted different ways depending upon the context of what is going on in the market. If the TICK was at -200 on the previous bar, and goes to +800 on the next bar, that is probably the start of a price run up. If the TICK was at +760 on the previous bar, and goes to +800 on the next bar, that is a totally different situation. So large, medium, or small TICK readings, in and of themselves really don't have a lot of meaning to me.

[TimRacette 11]

  Tradewinds said:

I was thinking about whether there is a way to combine TICK data and Advance/Decline data. I don't know if it would have any meaning. The TICK and Advance/Decline data are often synced up. But sometimes they diverge. For example, the TICK will be going up, while the Advancers/Decliners are still going down.

 

This is how I use the tick.

 

A high or low tick at the high or low price could signal the high or low of the day. When we have a high tick and continue to make new highs, we will continue to make new highs until a new high tick is reached. If we have a low tick for the day and are making new lows, we will continue to make new lows until a new low tick is reached.

[david22 10]

  Tradewinds said:

Is that the same as Up Volume and Down Volume? I chart the Up Volume/Down Volume ratio.

 

yes its the same, advance/decline volume is up/down volume..

 

although its much more accurate if you custom calculate

this for a basket of stocks like the sp500, assuming you

trade the index.

[Tradewinds 12]

  david22 said:

although its much more accurate if you custom calculate

this for a basket of stocks like the sp500, assuming you trade the index.

 

What is the custom calculation that you use? I've experimented with including the Unchanged data, but it doesn't seem to me to make that much difference. I've taken the difference UVOL-DVOL or used the ration UVOL/DVOL. The ratio seems to track the e-mini more closely.

[TimRacette 11]

  Tradewinds said:

What is the custom calculation that you use? I've experimented with including the Unchanged data, but it doesn't seem to me to make that much difference. I've taken the difference UVOL-DVOL or used the ration UVOL/DVOL. The ratio seems to track the e-mini more closely.

 

I use the thinkorswim platform and use $ADVN-$DECN and $UVOL/$DVOL for NYSE and then add /q to the end of each symbol for NASDAQ.

[david22 10]

  Tradewinds said:

What is the custom calculation that you use? I've experimented with including the Unchanged data, but it doesn't seem to me to make that much difference. I've taken the difference UVOL-DVOL or used the ration UVOL/DVOL. The ratio seems to track the e-mini more closely.

 

 

The custom uvol/dvol only takes into account volume for the sum of the 500 stocks

that makeup the sp500 index. The calculation is nothing special, it just calculates up/down volume every few seconds using intraday close price as opposed to the

standard uvol/dvol which used Eod close only.

 

You can easily create this yourself using something like neoticker which is a

program that can do many market internal related calculations like tick, uvol/dvol, trin, adv/dec etc..

 

Or you could do this using an excel spreadsheet but you would need a bit of programming

skills..

[Tradewinds 12]

  david22 said:

You can easily create this yourself using something like neoticker which is a

program that can do many market internal related calculations like tick, uvol/dvol, trin, adv/dec etc..

 

I found the TickQuest website and quickly looked around. For what I need, I don't think I'd need special software. My broker's platform provides TICK and Advance/Decline data. Although it seems a little slow, but it's actually all I need. If I had an automated system making split second decisions, I'd probably go with some heavy duty, specialized stuff.

[TimRacette 11]

  Tradewinds said:

I found the TickQuest website and quickly looked around. For what I need, I don't think I'd need special software. My broker's platform provides TICK and Advance/Decline data. Although it seems a little slow, but it's actually all I need. If I had an automated system making split second decisions, I'd probably go with some heavy duty, specialized stuff.

 

Ya you can get the data from the thinkorswim platform too for free.

[bleengrue 10]

Even you are right about the tick, in this case $TICK is an indicator measuring the overal market. $TICK is computed from the net of all UP-TICKs minus all DOWN-TICKs at a given point during the day in NYSE.

[bleengrue 10]

Advancers/decliners are calculated based on the previous days closing price whereas the $TICK is based on ticks.