Hi Kaaren,

Great question, it's a FAQ from traders over the years. Yes, I cover the TRIN (Arms' Index) in my various educational materials; the main way I use it for myself is as a barometer of buy/sell bias in the markets, on a realtime basis (which is why both the NASDAQ/NYSE TRINs are in their own updating time/sales windows for me to follow, they update every 30secs).

Though there's much more to it, the basics are that:

a) I try to avoid trading if either TRIN is between .7 and 1.5 (1.0 indicates buy/sell pressure is exactly equal)
b) I have a long bias and primarily look to buy if the TRINs are <.7
c) I have a short bias and look to buy short ETFs and/or short stocks and/or scale out of long positions, if the TRINs are >1.5.

Best wishes with it,

Ken

__________________
Good trading,

Ken Calhoun, Pres.
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p.s. per sec/cftc/ftc regs, none of this is to be construed as trading recommendations, it's just for educational use only, so you can "peek over my shoulder" to see what I'm doing with some of my trades. See www.daytradingu.com/disclaim.htm for full disclaimer.
These pages contain excerpts of actual trades I've made; it's not a complete record of every single trade I make. Some days I'll take trading wins or losses that I do not take the time to screencap and post online; it's a partial record of some of my trades. Note that I am not making income nor profitability claims of any kind. Most traders lose regardless of what they do. The majority of my personal income comes from my training business. I try to capture the best highlights of successful days so you can see practical examples of what I'm trading. There are also days in which I incur losses (and wins) which are not shown. This is simply a partial record showing highlights of some of my successful trading days. No representation is being made that other traders, including customers, will be able to trade like I do. Generally expected (average/typical) trader results are that all traders incur trading losses and most do not become profitable, regardless of the training they get. Trading is a speculative, high-risk activity.