ADI TICK Extreme Zones

Created by ADI(@adikvcs)

Note: Understanding TICK and when to know which strategy to use is key. This tool is best used in conjunction with other technical analysis methods and proper risk management strategies. If you want to learn more about this script and how to use it join our discord community.

ThinkOrSwim Link: http://tos.mx/!uStIYxkc (Updated 02/26/2025)
TradingView Link: https://www.tradingview.com/script/uy7mcV64-TICK-Extreme-Zones-Indicator-Overlay/ 

Version History:

• V1.0 BETA: Initial release.

• V1.1 BETA: Improved label condensation. TICK labels now change color to reflect values.

• V1.2: Added an option to display only (+-)1000 values. Includes a TICK reading label.

• V2.0: Enhanced label coloring, added Quiet Zones, and adjusted calculations to reduce noise post 9:30 AM EST. Introduced $ADD and VOLSPD labels, with VOLSPD visibility limited to the last trading hour.

• V2.1: Improved label coloring and separation of TICK and VOLSPD labels. Added an option to disable ADD/VOLSPD labels. Also, removed old functions.

(02/26/205 Update - Adjusted label coloring for better readiblity

Usage of $TICK for Market Trend Analysis:

1. Trending Market:

   • The TICK index can persistently remain above or below zero during a trending market.

   • For an uptrend, consider entry points when the indicator revisits zero.

   • Employ EMAs for additional trend confirmation.

2. Rangebound Market:

   • Initiate a long position when the TICK index drops below -1000 and exit at +1000.

   • Pair these readings with key support and resistance levels for better trading decisions.

3. Divergence:

   • Monitor for divergence between the TICK index and price to assess market strength.

   • An example would be a scenario where a stock's price is making lower lows while the TICK index is making higher lows, indicating potential weakening of selling pressure.

4. What is ADD & VOLSPD ?

• ADD (Advance/Decline Differential): ADD, or the Advance/Decline Differential, measures the difference between the number of advancing stocks and declining stocks in a market index. It's a market breadth indicator that helps gauge overall market sentiment and strength, where a positive ADD suggests bullish conditions and a negative ADD indicates bearish conditions.

• VOLSPD (Volume Speed): VOLSPD, or Volume Speed, represents the rate at which trade volume is changing over a specific period. It's used to identify sudden increases or decreases in trading activity, which can signal potential market moves or shifts in momentum, with higher spikes often associated with significant market events or news.

Zones (By Default only +/-1000 are shown or commented out in the code):

• Magenta: +1000

• Light Blue: +800, +600

• Red: -1000

• Yellow: -800, -600

Disclaimer: Trading options involves substantial risk. This script is for informational purposes only and is not a guarantee of success. Always conduct thorough due diligence, and practice proper risk management.