Time Dilation: How Can a Watch Tick Slower?

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Frannas
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They say that when you go faster in space your watch would tick slower. How can the watch tick slower when the watch has a constant ticking rate determined by the gearratio?

(I do understand that the rate of time decreases as the velocity increases)
 
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It is ticking slower relative to a still observer
Relative to you (as it is on your hand) the tick rate is the same of course.
 
Frannas said:
They say that when you go faster in space your watch would tick slower. How can the watch tick slower when the watch has a constant ticking rate determined by the gearratio?

(I do understand that the rate of time decreases as the velocity increases)

As Dmitry has said, these effects are dependent on relative velocity. There is no absolute velocity so you must say with respect to whom you are moving.