$ADD vs $TICK

[Richard Yu]

$ADD tells us the cumulative ADV-DECL issues while $TICK tells us the ADV-DECL ticks.... So how should I treat them differently for their subtle difference? Is $TICK more senisitive while $ADD can give me a clearer idea on the trend? thx.

[DuaneG]

Hi Richard,

You may want to read through the following Weekly Trading Article by Guy Ellis. Hope this sheds some light on your query.

[DaveN]

Hi Richard,

I'd agree with your general statement. It seems to me that $TICK would be more sensitive to short term movements. Depending on how Adancing and Declining are measured, it would seem to take longer for an issue to flip from adv to decl (I'm assuming the standard approach WRT the previous day's close.)

I can imagine a rally off the market open which would turn many stocks into Advancers. A pullback in the rally could be seen in the $TICK, but I'd imagine the $ADD would reverse or back off more slowly.

I guess the best approach is to plot them both and watch them in an active market.

BTW, I especially liked the comment about not directly linking the S&P500/ES movements with the $TICK, as it represents the broader market. In practice, I find that divergences provide additional, and oftentimes, useful insight.

[Richard Yu]

I used to use $TICK but then I find it fluctuate too wildly. So I am now plotting $ADD with a LSMA on a 3 min and 12 min chart to see the trend. When there is a change of trend in $ADD chart, I will be alerted and be careful of change of trend in price chart too. thx.

[theplumber]

I'll offer my 2 cents. The stock market is just that, a STOCK market. The action in 30 stocks that make up the DOW don't reflect the overall market, which is very telling to future direction to even ES. When I'm taking larger positions with a larger perspective, like not scalping for .50, then figureing out the health of the market is vitally important to me. The $TICK is more a momentum indicator, change in up ticks and down ticks. This is where a move will start first. Don't underestimate a 1000 tick reading, it will turn the boat known as the $ADD line. One characteristic of a trend day up is mild pull backs with very little negative ticks. Trend days down will show a 50/50 skew with the tick reading BUT the $ADD won't support ANY rally. Yesterday price tested the high of the day, but look what happened to the ADD line. It showed the broader market was being sold. The tick reading led the little rally around luch time but again the health of the market was weak, because the ADD line didn't support the advance. What was this rally then? Futures sometimes lead and sometimes they don't. An example of not leading is when a program or VWAP hits the tape, the broader market will lead first. Yesterday was an example of a large dealer closing their shorts in the big contract, which didn't move the broader market like it did the index, so it sold off. Any change in trend will be reflected in the health of the broader market of the AD line but that turn will start with the tick reading. How does this help trading ES? I lift the bid/offer (depending on the direction) with a high tick reading change. The lowest point in the tick was around negative 900 but changed on a dime to positive 300, a change of over 1000. Set an alert to changes within a specific time period and see how predictive it can be to make a quick and easy point or two for ES. Many pro's collect huge amount of symbols to make their own ADD and tick readings because of the delays in these symbols coming from the exchange, then to esignal, then to you, to feed a simple futures/index ETF system based on the relationship patterns of these 3 symbols. Anyways, be creative and curious because patterns are there.

[Richard Yu]

How about $VOLD?? Do you use it too?

[theplumber]

Originally posted by Richard Yu
How about $VOLD?? Do you use it too?

I do, don't know if the question was to me or not. Below is my main trading screen. The lower right is the $tick with overlayed symbols of $add and $vold. They more or less tell me the health of the market, and today it stinks. Check out the 2SymMA efs Alex wrote, do a search. I modified it to show volume and one for the ad line.