Written by A.J. Brown

The Importance of the Closing Tick

Every day, there is a tug-of-war in the market.

The bulls pull one way, the bears pull the opposite way.

At the end of the day, there is a winner for that specific day. At the end of the week, there is a winner for that specific week.

And so on.

But what does this mean? What are the implications for the average trader? I’ll tell you…

The Closing Tick Is a Big Deal!

All other things being equal, the closing tick is more important than any other tick of the day.

This is because the closing tick has a finality that the other ticks don’t have. The closing tick tells you where the market finished the day. It tells you whether the bulls or the bears won that day’s tug-of-war.

No other intraday tick can provide you with that information.

Which is one reason it’s difficult to be an intraday trader. You just don’t get as much insight into the market as an end-of-day trader.

Here’s how I see it…

  • Following intraday ticks is like looking through a microscope.
  • Following closing ticks on a daily basis is like normal vision.
  • Following closing ticks on a weekly and monthly basis is like looking through a telescope.

Turns out, normal vision is a good thing for a trader to have.

It’s a good balance between low-level detail and high-level trends.

Moral: Don’t get too hung up on intraday ticks. Focus on daily closing ticks instead.

Best regards always,

A.J. Brown

P.S. My entire option trading system is based on making end-of-day trades. This is why it’s possible to make profitable trades in less than 30 minutes a day. Click here to learn more.

4 Responses to “The Importance of the Closing Tick”

  1. LALIT TUTY @ 9:14 pm:

    RESPECTED SIR/MADAM
    WHAT WILL BE HAPPENED ???
    IF OPEN =CLOSE=OPEN=CLOSE=SAME PRICE.
    WITH REGARDS
    LALIT TUTY

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  2. A.J. Brown @ 8:35 am:

    Hi Lalit,

    I think what you are describing is a market that is “marking time”. In other words, it’s being indecisive. They call that a doji. On those day’s it’s important to look at how high was the intra day high versus how low was the intra day low and how heavy the volume was. That can give some understanding around whether the next trading day will start with carryover momentum from the previous trading day.

    Great question!

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  3. Lucy Law @ 11:43 am:

    You said that you have substantial earnings from end-of-the-day trades. Many experts have said that daily trading does not make you an “investor”. However, you said that you spend under 30 minutes a day doing it. That would suggest that you are not a “day trader”. What do you call what you are doing?

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  4. A.J. Brown @ 2:16 pm:

    HI Lucy,

    I’ve set up my trading practice as a business versus running it as a lone investor. I use a lot of automation in my trading practice that allows my time investment per day to total less than 30 minutes.

    A.J.

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