Using the NYSE TICK and TRIN Indicators for Day Trading

The Arms Index (TRIN) is a technical analysis indicator that compares advancing and declining stock issues and trading volume as an indicator of overall market sentiment.

Users can also add multiple horizontal lines by entered comma separated values in the parameters box. The Arms Index is just one indicator and chartists should employ other aspects of technical analysis to confirm or refute signals generated. On a log scale, a move from. The choice depends on individual preferences. There is no right or wrong answer when it comes to scaling.

Advance/Decline Technical Analysis

Get detailed information on the NYSE Short Term Trade Index including charts, technical analysis, components and more.

You will see TRIN charts in real time and you will be able to scroll this indicator back in history and test your trading system. Deeper look into TRIN charts and Breadth technical analysis with explanation when it confirms a trend and when it suggest a possibility of a trend reversal. If the TRIN has a value greater than 1, it indicates a negative market sentiment; conversely, values below 1 denote a positive sentiment. Table 1 below provides the data used in the following examples where we discuss and compare four hypothetical TRIN calculations.

In this case, the TRIN indicator has a value greater than 1. Table 1 indicates that during this particular uptrend, declining stocks were traded more actively than advancing stocks. The average volume traded per declining stock was 3K, compared to an average volume per advancing stock of 1.

This implies that even though the index was advancing, selling pressure in the group of declining stocks exceeded the buying pressure in the group of advancing stocks - a bearish sign. In this example, the TRIN reading was below 1.

During this particular uptrend, advancing stocks were traded more actively than declining issues. The average volume traded per advancing stock was 2. This means that during the uptrend, the buying pressure in the group of advancing stocks surpassed the selling pressure found among declining issues - a bullish sign. In this third case, the TRIN indicator stayed below 1. This is an example where the index was in a downtrend but where advancing stocks were being traded more actively than declining stocks.

The average volume traded per advancing stock was 3K, compared to an average volume per declining stock of 1. Even though the index was losing ground, the buying pressure in the group of advancing stocks was greater than the selling pressure found among declining issues - a bullish sign. In this last example, the TRIN indicator was above a value of 1. This is a further instance where the index is in a downtrend, but in this particular case, declining stocks were traded more actively than advancing stocks.

In general, strong market advances are accompanied by relatively low TRIN readings because up-volume overwhelms down-volume to produce a relative high AD Volume Ratio.

A strong up day in the market usually pushes the Arms Index lower, while a strong down day often pushes the Arms Index higher. As you can see in the calculation above and in the corresponding chart below, the AD Volume Ratio surged to 7. This produced a TRIN value well below 1. Similarly, strong declines are usually accompanied by relatively high TRIN readings because down-volume swamps up-volume. In the example above, the AD Volume Ratio plunged to.

This produced a TRIN value well above 1 3. The Arms Index can be displayed with a semi-log scale or an arithmetic scale.

Log scaling shows an equal distance for equal percentage movements. Arithmetic scaling shows an equal distance for each unit on the scale. On a log scale, a move from. This is reflected with the dotted blue lines on the chart below. On an arithmetic scale, a move from. The log scale evens out the fluctuations of the Arms Index.

Notice how spikes above 2 on the arithmetic scale look out of proportion relative to the overall fluctuations. The data itself is not different, just presented differently.

There is no right or wrong answer when it comes to scaling. The choice depends on individual preferences.

Overbought and oversold levels for the Arms Index depend on the historical range and the smoothing if any. Surges above 3 are deemed oversold and dips below.

The NY Composite is in a larger uptrend because it is above its rising day moving average.