the definitions of uptick and downtick | Traders Hideout


futures.io - futures trading strategies, market news, trading charts and platforms


Traders Hideout


Discuss day trading practices and futures trading strategies on this forum for all markets. This forum is also for discussing and reviews for brokers, data feeds, and commercial or third party add-ons




 

the definitions of uptick and downtick

  #7 (permalink)

Merida, Yucatan, Mexico
 
 
Posts: 101 since Nov 2010
Thanks: 14 given, 57 received

the definitions of uptick and downtick


sureway View Post
Today I have been examining the concept of uptick and downtick. And start to question my understanding of them.



Here are their definitions from TradeStation.com



Uptick is a tick that is higher than the previous tick (or the same as the previous tick). A downtick is a tick that is lower than the previous tick (or the same as the previous tick). Adding upticks and downticks together provides the total number of ticks.



Suppose we have the following toy example of 5 trading records (only prices shown here). The price started with 101 (dropped from a higher price say 102), dropped to 101 and then climbed up to 101.



101

100

100

100

101





According to TradeStation's definitions, we have 4 downticks (ticks 1 to 4) and one uptick (tick 5). Now I am questioning whether this is the correct understanding of mine or whether the definitions are wrong. Here is a reversal point from a decrease to an increase. The buy side need to eat up all the selling orders to get the 101 price (tick 5). Hence the 3 100$ ticks should be considered as part of the buying force (upticks) instead of the selling force (downticks).



As I am new to the field, just wanted to check whether I missed something out here. Thanks a lot!


Based on the definitions you gave, there is one downtick, three non-ticks, and one up tick. Since it says “or the same as the previous tick”, then the three “non-ticks” count as both upticks and down ticks. So the net is zero. Total is either 1 down and 1 up, or 4 down and 4 up. I could be wrong. I think it is 4.




Sent from my iPad using futures.io

Reply With Quote