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Trading with TRIN & TICK
Market Internals are used to keep your opinion about the market’s direction in alignment with the market, not what you “want to happen.”

Need to constantly interpret the raw numbers, prior support and resistance levels, as well as the trend of internals.

We have a neutral, above average, and climactic levels. They change over time, so need to back test.

Use internals for confirmation of a bullish or bearish bias. Conflicting signals give valuable clues to stand aside.

Price is the final trade determination (e.g., candlestick patterns, Moving averages, support and resistance, retracement levels, ect…)

TICK INDICATOR: Used to determine market strength and directional changes.
Readings above zero indicate more stocks upticks, favor longs.

Prior highs and lows are used as points of support and resistence in the broad market.

Readings below zero indicate more stocks trading on downticks, favor shorts


The tick and the TRIN measure refer to the pressure or the flow of trades in and out of the market. The tick is essentially an indicators made up of subtractions, while the TRIN is essentially a calculator. The tick covers all stocks on the New York Stock Exchange (NYSE), as does the TRIN, while the tiki measures only the Dow 30 stocks. Neither the tick nor the tiki utilize volume in their calculations, but the TRIN does. Finally, each indicator has important and distinct characteristics.

(actual value)
(actual value)
Mega Bullish
+0.60 or lower
+500 to +800
+0.80 or lower
+200 to +700
0.9 to 1.00
-300 to +200
+1.00 or higher
-500 to -700
Bear Ugly
+1.30 or higher *
-500 to -700, banging on -900+

TRIN becomes "overcooked" bearish and due for a reversal when the readings reach above the 1.80-2.00 level on the day AFTER a previous down day with extremely high TRIN readings. Prepare to reverse long upon seeing such readings.

The TICK indicator is based on the statistic computed from the net of all UP-TICKs minus all DOWN-TICKs at a given point during the day in NYSE. If 500 stocks advanced on their last trade or TICK, 200 declined and 500 were unchanged, the TICK would be +300 (500 minus 200). The closing TICK is based on the last trade of the day. TICK statistics are available for the NYSE, Nasdaq and AMEX. The High 5 indicator complex uses only the NYSE numbers.

The TRIN (also known as ARMS Index, named after its inventor, Richard Arms) is short for TRaders INdex. It is a contrarian indicator to detect overbought and oversold levels in the market. Because of its calculation method, the TRIN has an inverse relationship with the market. Generally, a rising TRIN is bearish and a falling TRIN is bullish. The TRIN is the advance/decline ratio divided by the advance volume/decline volume ratio. The formula for calculating it is: ((Advancing issues/declining issues) / (advancing volume/declining volume))

What is important on these 2 indicators is not only what the current reading is, but the trend of the indicator.  Is is changing character, going from selling to buying or vice versa.

Day trading with the Tick
The NYSE Tick can be used as a short-term indicator while day trading.
Although it represents the number of stocks ticking up minus the number of stocks ticking down on the NYSE, it can be used as a barometer for stocks trading on all US Exchanges.
For example, if the Tick reads +200, then 200 more stocks on the NYSE are ticking up then are ticking down. This is obviously a bullish signal. If the Tick should read -354, then we understand that 354 more stocks are ticking down then are ticking up. This is a bearish signal. In addition to the actual "number" reading of the Tick, one should also pay attention to how the Tick is trading in relation to it's support and resistance. Be sure to watch it on a 5 or 15 minute chart in realtime. If you don't have access to realtime charts, you can us the above  link to keep track of the NYSE Tick. T
When the Tick remains positive on the day bullish momentum can continue. When the Tick remains negative, bearish momentum can continue. However, if the Tick should rise over +1000, the market will likely soon reverse because it has become over bought. The reverse is also true. If the Tick should fall below -1000, the market will likely reverse because it has become very oversold.
If you happen to be long when the Tick begins to rise over +1000 or short when the Tick begins to fall below -1000, you need to begin to lighten up on your positions or close them entirely in anticipation of a reversal.
To be extremly careful while trading, only enter longs when the Tick is above zero and shorts when the Tick is below zero.


Day trading with the Trin
The Trin is a breadth oscillator which aids in the measurement of internal market strength or weakness. Also known as The Arms Index (because it was invented by Richard Arms), the Trin is an acronym that stands for The Trading Index.
Simply put, the Trin measures volatility within the stock market. The Trin represents the relationship between advancing and declining issues by measuring their volume flow. The Trin is commonly used as a short term trading tool.
The Trin also has an inverse relationship with the Tick. In contrast to the Tick, a rising Trin signals that the Bears are beginning to take control. Likewise, a falling Trin tells us that the Bulls are taking control of the direction of the market because a falling Trin shows us that more volume is flowing into advancing stocks than declining stocks.
The formula for the Trin is as follows:
Advancing Issues / Declining Issues
Advancing Volume / Declining Volume
This formula, like the Trin itself, helps us to descern whether volume is flowing into advancing or declining issues. The Trin will read under 1.0 when advancing stocks are the major source of volume and above 1.0 when declining stocks are the predominant source of volume flow in the market.
In Brief:
A rising Trin depicts a weak market and a falling Trin depicts a strong market.

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