Tinel's sign is the sign that a nerve is irritated. Tinel's sign is positive when lightly banging or percussing over the nerve elicits a sensation of tingling, or 'pins and needles,' in the distribution of the nerve.
For example, in carpal tunnel syndrome, where the median nerve is compressed at the wrist, the test for Tinel's sign is often positive, eliciting tingling in the thumb, index, and middle fingers.
Procedure: First you have to hyperextend the wrist to get the median nerve in the carpal tunnel more juxtaposed to the flexor retinaculum. Then tap the skin over the flexor retinaculum midway between pisciform bone and hook of hamate and then observe the patient's response.
This test can also be useful in the diagnosis of Tarsal tunnel syndrome where the tibial nerve is entrapped.
Another test in Carpal tunnel syndrome is Phallen's test.