TICK Divergence + Heikin Ashi

The TICK Divergence + Heikin Ashi indicator provides a comprehensive toolkit for analyzing NYSE TICK data, identifying market sentiment shifts through divergences, trend zones, and multiple moving average systems.

Usage

The indicator can be used to gauge market internals and sentiment, primarily on lower timeframes such as 1-minute to 5-minute charts where TICK volatility is most informative. Users can choose between three display modes (Line, Bar, or Heikin Ashi) to visualize the TICK index.

Key usage scenarios include:

• Divergence Trading: Identify potential reversals when price makes new highs/lows that the TICK index fails to confirm. The script identifies regular and hidden bullish/bearish divergences.
• Trend Confirmation: Use the background coloring and significant zones (Neutral, Trend, and Extreme) to determine if the market is under sustained buying or selling pressure.
• Crossover Strategies: Monitor crossovers between fast/slow moving averages or smoothed variations to identify momentum shifts within the TICK data.

Details

The NYSE TICK index represents the number of stocks on the New York Stock Exchange trading on an uptick minus those on a downtick. It is a classic "market internal" used to measure immediate buying or selling pressure.

This tool enhances the raw TICK data by applying Heikin Ashi calculations, which help smooth the inherent noise of the index. Additionally, the script includes a pivot-based divergence detection algorithm that compares TICK extremes against price action.

Settings

TICK Data

• Symbol: The ticker symbol for the TICK index (e.g., USI:TICK).
• Show TICK as: Choose between Line, Bar, or Heikin Ashi visual styles.

Dual Moving Average

• Fast/Slow MA: Toggle visibility and set the type (SMA, EMA, HMA, etc.) and length for two independent moving averages.
• Show MA cross: Displays shapes when the Fast MA crosses the Slow MA.

Moving Average / Smoothed MA

• Base MA: A third moving average option, often used as a baseline.
• Smoothed MA: A moving average applied to the Base MA to filter out market noise.

Divergence - Pivot based

• Source: Choose between High/Low or Close for divergence calculation.
• Lookback Right/Left: Define the number of bars required to confirm a pivot.
• Range Max/Min: The lookback window for identifying historical pivots to compare against.

Significant Levels

• Neutral zone: Sets the threshold around zero where the market is considered balanced.
• Trend zone: Thresholds that trigger trend-based background highlighting.
• OB/OS extremes: Defines extreme overbought or oversold levels for the TICK index.

FAQ

How do I interpret the TICK background colors? The background shifts based on the TICK index's relation to zero or specific moving averages, and intensifies when the TICK reaches defined "Trend" or "OB/OS" levels, indicating high-conviction market movement.

What timeframes are best for this tool? Because the TICK index is highly volatile and resets frequently, it is most effective on intraday timeframes like the 1m, 2m, or 5m charts.

How can I access TICK Divergence + Heikin Ashi? You can get access on the LuxAlgo Library for charting platforms like TradingView, MetaTrader (MT4/MT5), and NinjaTrader for free.