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At 5:30 PM -0800 2/7/99, M. Edward Borasky wrote:
>Define a bad tick. Is it a price where a trade never happened? Or did
>someone actually exchange the tradeable at that price??
It could be a glitch in transmission, a keying error by a person recording
what he hears on the floor, a stock trade delayed 20 minutes by a slow
brokerage firm or any of hundreds of other sources. The bottom line - what
comes over your real-time data feed has errors.
Any indicator that uses Highs or Lows of a bar is subject to such errors as
it only takes one bad tick to set the high and low of a bar. Opens and
closes of a bar are much more reliable since the probability of a bad tick
occurring on the open or close is much lower.
And as they say, "Garbage in, garbage out".
Bob Fulks
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