Glossary · T
What is Tick rule?
A method of classifying a trade as a buy or sell by comparing its price with the previous trade's price (uptick = buy, downtick = sell).
In context
Its weakness shows up in quiet, ranging markets. Suppose gold trades back and forth between 4000.0 and 4000.1 for several minutes, and the last price change was an uptick. Dozens of trades at 4000.1 will all be labelled buys simply because of one old uptick, even if many of them were sellers hitting a bid that had moved up to 4000.1. The tick rule carries errors forward.
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