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E-mini Futures Trading Basics Using the $TICK Index - YouTube
Channel: TopDogTrading
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they welcome to this video on e-mini
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futures trading basics using the $tick
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index. This is a powerful tool it's
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changed a bit over the years and it's
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very popular so i want to share with you
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how it really works because I find a lot
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of people are not teaching this
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correctly so can be little heterodox
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with you today but hey most successful
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trading is heterodox meaning an orthodox
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or against what's normally taught so
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first of all we have two things on our
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chart these are two minute bars you can
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even go down to one minute out something
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like they'll tell you why in a minute so
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we got the email is down here and here
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we have the tick index now some people
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call this the tick indicator and that's
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wrong this is not an indicator it's an
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index an indicator is something that is
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a derivative of other things
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mathematical formula things like price
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and volume and indexes are just what
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they are they're not derivatives of
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anything else in this case they're
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basically statistics so what is a tick
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tick is when a stock in this case is
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based on the stock in the stock market
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new york stock exchange specifically in
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this case it is when a stock moves up so
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if the last trade is traded at a higher
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price than the previous trade then that
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would be a an uptick and conversely if
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the last trade that trades want trees
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lower than the previous trade before
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that then that would be a Down tech so
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literally every single trade that comes
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through the market is an uptick early
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down tech from the previous trade so
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very short-term indication on this index
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that's the first thing you need to know
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about it is a very very short term
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indication now i use three levels and
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these have changed over the years but in
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today's market i find these levels very
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helpful
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so first of all you get your midline
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actually it's 0 &
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so zeros neutral alright and then I've
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got my upper line here which is 600 and
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then the extreme language is a thousand
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them and down below here we have
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negative six hundred and negative 1,000
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so these are very very extreme obviously
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anything around zero is neutral now
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here's what is a little unusual a lot of
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people will say that when you get down
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to this lower levels that that is
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bullish that the market is getting
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oversold and if you saw my videos on the
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RSI you've heard me talk about this
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concept that is not correct because
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what's actually happening here is we are
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getting bearish movement so i actually
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put on my charts a and audio alert so
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that when the tick index comes and hits
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this line here or hits the very lowest
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line which happens much more rarely that
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an audio alert goes on and that tells me
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that there is now a very bearish move in
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the market so my sentiment switches to
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perish and I don't even have to watch
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the Charlie haven't actually on a
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separate monitor i don't even really
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watch when the audio are going for
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certain things then alerted 200k women
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this is bear so as you can see it hits
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the red line there it hits the red line
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there and indeed the market does end up
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going down quite a bit
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now the other side of it is so okay we
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go down we hit the red line and which
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is- 600 as it retraces we like to see it
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hold the zero line now it's not going to
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hold it exactly but we don't want to do
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is go back up to positive 600 or the
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green line so we wanted to go down here
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hit this level multiple times and then
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as the retrace and I've stay here around
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zero so their strength down and weakness
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up and that creates the bearish movement
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that is showing bearish sentiment in the
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market
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now a neutral market is when the tick
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index just kind of hovers around the
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zero line because a little bit above
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little bit below little bit above open
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below never hits negative 600 or
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positive 600 that indicates basically a
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choppy market that's one of the
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questions I get a lot of people asking
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me how do I stay out of a choppy market
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well this would be one way that you
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could do that now notice all of a sudden
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then boom we get a nice impulse move and
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it goes up in his positive 600 so now
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we've become bullish and if you look at
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this you know the market basically go
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sideways during this time came up with
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this low and then went sideways and then
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once we hit that then from there to
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there yeah it does go up a bit it's not
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going up a huge amount again remember
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this is a very short-term chart by the
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way that's is not just a two minute
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chart so this is best for scalping real
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short term trading this thing can change
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very quickly we don't go to the other
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thing is that we don't go back up and
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hit 600 again doing
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that's a bit of a warning now on the
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other hand on the retraces it is pretty
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much holding the zero line and one way
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to know for holding the zero line yes it
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was a little below the zero line to look
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each one of these bars is still touching
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the zero line of them get completely
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blow it and most importantly none of
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them get down to negative six hundred so
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that's indicating to me that if they're
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still bullish sentiment here may not
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have been a strong as the bearish
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sentiment we have over here but and
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that's why it moves up on a more gradual
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basis now look at this chart here so
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again same principles we started out
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market doesn't hit negative 600 or
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positive 600 we wait for the first time
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it does boom there it as now notice
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price hasn't really gone down much in
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fact up until this time
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pretty section has been going up and
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then we get this and from there on out
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market goes down noticed by the way
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again same principle goes below 600 when
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it comes back up to retrace it holds the
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zero line every one of these bars it's
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watching the zero line goes back hits
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negative six hundred again that's a good
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sign retraces now it gets a little bit
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of here where we might not like it as
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much but not quite as bad but anyway you
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catch a quick little move again
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hey you know that's what maybe 30
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minutes in the market that you are maybe
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a little bit longer than that but not a
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bad little trade if your scalp trader
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now let's get realistic nothing works
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all the time so I always loved issue
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examples that don't work you know a lot
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of courses and things people just show
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you all the the perfect textbook
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examples and everything looks great and
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then you go to trade it and say hey why
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didn't this work
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well that's because nothing works all
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the time in trading we're not trading
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certainties we're treating probabilities
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so therefore you always have to have
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money management and risk management
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involved because nothing works all the
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time so here's a great example of that I
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love to point these out in my courses
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and things i always do this because I
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want to get in your mind the fact that
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no i'm not expecting this is going to
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work every time
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so here we go hit positive 600 right and
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sure enough the market you know been
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going up a little bit that's cool
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now however it comes back down and
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doesn't hit 600 again but now it's
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negative six hundred well that sucks
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right
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it went from negative 602 positive 600
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then right back down to negative six
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hundred again
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well yeah sometimes that's going to
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happen so now the point is you can't use
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this alone just like anything else we
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need to put together a number of non
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correlated variables to give yourself a
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probability scenario there's no Holy
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Grail and this isn't holy grail either
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so this can be one extra piece of
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evidence that you use along with
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whatever training methods are currently
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using but don't use it alone is not
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foolproof and so I like to show these
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examples now them by the way after it
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goes down to negative six hundred goes
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right back up to positive 600 so kind of
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crazy market right now right
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very volatile so we had big move in one
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direction the other another another now
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however
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it decides to settle am so now it stays
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keeps coming back here hitting 600
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almost there and on the downside
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everyone in these bars is touching the
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zero line and therefore at this point
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works very well and from this point out
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we can say okay we can be bullish here
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so it becomes uni-directional so on
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these other times you basically just
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have to have your other indicators in
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line watch price action and most
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importantly of your money management of
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risk management in place and one other
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thing i want to mention too is timing
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your entries so what will happen is the
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indicator or not the indicator but the
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index will come down and it hit one of
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these levels in but if you under that
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level you're basically buying when the
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market already down i like to if you do
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that you're going to be paying retail
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like to make for retrace and pay
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wholesale and i use my timing or recycle
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indicator in order to tell me when to
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get in be happy to make that available
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to you if you subscribe on youtube
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channel send me an e-mail period top dog
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training com i'll be happy to share that
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with you absolutely free
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now here's the last example I want to
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get we haven't seen this yet and this is
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more rare especially these days but it
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does happen and that's where the index
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comes down to either negative 1,000 goes
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up to positive 1000 now back in the days
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of yore I was always taught that that's
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a reversal situation because it's so
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extreme and unfortunately then I
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actually started trading and i found out
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that wasn't really so true it is extreme
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and sometimes the murder will reverse
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off of that but again it's really got to
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do with the dominant direction of the
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market the market is in a dominant
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direction down so it goes down retraces
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a little bit goes down again what
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happened what happened there well it
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goes back and hits a negative thousand
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again and then it almost does it a third
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time
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so this whole time you know this speak
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is just a bearish bearish market it's
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usually not good to trade against the
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dominant energy of the market an amateur
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seem to always want to do that
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I just always want to do that to you so
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I know we all as human beings seem to
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have some kind of instinct in us that we
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just want to trade against the dominant
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direction of the market let me tell you
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that's the exact wrong thing to do
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always trade with the dominant direction
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of the market there's times when you can
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create against trend that's when its
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extended and gets weak you get an
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exhaustion pattern things like that so
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there are setups for terms of reversals
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but believe me even though the
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risk-reward is good the win-loss ratios
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not as good and it's just so much easier
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to just go with the flow of the money so
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there you go
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I'm so even these extreme and by the way
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i'll say one more thing here i found
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that on these extremes usually the
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number three is pretty darn good
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so if you do want to look for an
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exhaustion pattern on the wait for it to
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hit a thousand three times then look at
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everything else look for other things
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that would cause you to think the trend
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is going to reverse if those lineup
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after three times hitting a thousand or
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negative thousand you may just get a
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trend reversal at that time
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one last thing that I'll say to him
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there is a tick index for the NASDAQ and
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there's also a tin tick index for the
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down i don't find them to be as reliable
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whereas help so you might think well
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from trading the nq's or the ym maybe
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I'd want to or the diamonds or the cues
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and maybe I want to use the two index
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for those markets
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I don't find them to really be as
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reliable so i just use the tick no
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matter what I'm trading so if you like
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this video and please understand yep
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it's free
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take it use it but you do have a moral
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obligation to pay it forward by clicking
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on the share button below and share it
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on social media so other people can
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benefit from it as well if you're
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watching on youtube please click the
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thumbs up icon below and leave a comment
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because i love to hear from you guys i
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really love your messages and that gives
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me encouragement to keep going and
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making more free videos for you i'm also
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giving away one of my favorite trade
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strategies i called the rubberband trade
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this rubber band trade i take it pretty
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much every day and it's just a great
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trade it took out a very very high win
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loss ratio is very simple and I can get
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you that video absolutely free
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he just click on the top
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left corner there that image or if
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you're on a mobile device click on the
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little I with a circle around it in the
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top right corner of this video and if
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you're not watching on YouTube then
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there's probably link below or enough to
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inform on the side once you do that i'll
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personally emailed the video to you with
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the rubber band trade strategy
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