Repaints AGAIG Trading Path Chart for ThinkOrSwim

[csricksdds]

As Good As It Gets: THE TRADING PATH CHART FOR THINKORSWIM

THIS CHART HAS NO CANDLES – INDICATORS ONLY!​

In order to have an “edge” in trading, we need an indication to where the market is heading and what its next move might be (thus the development of indicators). Some day traders (like me) are looking for moves over a short period of time.
see the next post below for a full explanation of this chart and the overall concepts seen in all As Good As It Gets setups.

There may be other chart setups that don’t use candles, but this is my first using indicators alone. The top labels are fairly straightforward. I have added the DMI MTF (a free indicator from TI for which I added the Cyan Header).

This chart is called THE TRADING PATH CHART using HEAVY RED/GREEN ARROWS comprising “THE PATHWAY”. THE THICK RED/GREEN ARROWS ARE THE TRADING PATH. The thinner line is the EMA (Exponential Moving Average Price Line) and shows its relation to the solid White 20 EMA.

The SOLID Red/Green horizontal thick line shows Reversal Pivot Points on the chart and works with my Short/Long (possible) transition Bubbles.

The Price Pointer (on the chart) shows actual price movement.

The Yellow Dotted Dashed Line on the chart corresponds with the PSAR (Parabolic Stop and Reverse) Label showing number of bars since Last Direction Transition.

Added are the high/low 1 SD horizontal lines (frequent turning points), as well as my HiAlgoPivot (Red Solid Line)and LoAlgoPivot (Green Solid Line) Pivot Points. The PDHi (Previous Days High) and PDLow (Previous Days Low) are shown as White Lines .

Support/Resistance is shown as a Red/Green Cloud area.

Also added are SD (Standard Deviation) Vertical Lines: The RED Vertical Dashed Line shows when the stock or ETF has reached a +2.5 SD Extension (EXT UP +2.5 SD) and may be nearing a transition down; the GREEN Vertical Dashed Line shows a -2.5 SD Extension Down (EXT DOWN -2.5 SD) and may be nearing a transition up. These do not paint unless those levels are reached.

Also shown as Vertical Lines are: MARKET OPEN (Yellow); UK MARKET CLOSING 10 MIN (White); and POWER HOUR HEADS UP (White).

This should cover everything. I have been putting this together for two weeks without any losing days. If you can’t live without candles you can go to Added studies and strategies and delete AsGood_CancelCandles_Lines.

Here is an updated link with VWAP added to the chart. Refer to my tutor on Daytrading the VWAP
http://tos.mx/!cypFFgGo

https://imgur.com/a/hO2eyFK

 

[csricksdds]

This eighty-year-old man doesn’t have all the answers, so let’s just delve into some concepts. It’s the “concepts” that are most important (rather than the inner workings of a particular indicator).

I live here in The Villages, Florida and if I want to go to Orlando there are multiple ways to get there, but the destination always remains the same.

Our destination in the stock market works essentially the same as well. Our goal (destination) is to generate income trading options (or stocks). There are multiple ways to generate income (reach our destination) but, according to statistics, only about 10% of options traders accomplish this goal on a regular basis. Indicators, in essence, become our GPS (Global Positioning System) for finding The Right Trading Pathway.

Our bottom line then is to “follow the money” which means finding the “direction” where money is flowing. Thankfully, the market only moves in three directions, UP, DOWN, or SIDEWAYS. Money flows in, out, or stays rather static, causing the security price to go up, down, or sideways.

In order to have an “edge” in trading, we need an indication to where the market is heading and what its next move might be (thus the development of indicators). Daytraders (like myself) are looking for moves over a short period of time. Other traders (swing, or long term) are looking for trends over longer periods of time.

Cyclical: First, the market is set up mathematically using the bell curve we all learned about in High School. The Bell Curve consists of Standard Deviation Movements away from the mean. Since the market can only function mathematically, it is designed to move within 1 SD (One Standard Deviation) of the mean approximately 80% of the time. Option pricing is set based on that one standard deviation (taking into consideration volatility, time, and a few Greeks thrown in for good measure). This leaves 20% of the time for a Stock (ETF) to break-out above/below these levels.

Some trader “guru’s” (whatever a guru is) discuss what they consider to be “Rubber Band Trades.” These are merely trades that are “stretched” above/below their normal trading range, and are stretched like a rubber band that wants to go back to its original position (moving back to the mean).

Now let’s look at the Vertical Dashed SD Lines on my chart. Mine are set at 2.5 (or 2.75) looking for times when the security being traded is stretched to a point where it usually makes a change in direction and heads back towards its mean.

These Vertical Lines are not trading points for me. They represent a “heads up” that a change in direction may be imminent.​

Some other charting setups use “levels” as turning points. These levels are usually Fibonacci based (5, 8, 13, 21, 34, 55 etc.) and are known as frequent turning points (pivots) for the market.

My preference is to use multiple indicators in my charting, all designed to help find probable changes in direction from “multiple” slightly different perspectives.
When a Vertical SD line appears, I then look for a Short/Long Bubble, and then a Red/Green arrow, each suggesting a change taking place. I also look at my top labels to see what direction looks like from their perspective.

I only place a trade when multiple indicators are in agreement (my “edge” in trading).​

Since the market has a mind of its own, these indicators will sometimes “repaint” or even disappear.
If they disappear, I will frequently close my trade and re-enter at a later time (risk management).

MANY prefer oscillators which don’t repaint
(although oscillators will also immediately change direction at the will of the market, they just show the path behind their move).​

The TTM Trend Label at the top of my chart is oscillator based and shows Red/Green for direction, or Yellow when no direction (chop) is established.

The PSAR (Parabolic Stop and Reverse) shows where direction last changed overall.

The price/value of the SD Line is where the thin price line is crossing it. Place your pointer at that point and look to the far right to see what that price was.

It’s the concepts we need to know and understand. Once we understand some trading concepts and understand that multiple indicators are looking at direction from different perspectives, we can then pick a chart set-up that best fits our eye to help point us in the right direction.

In any case, “let the market lead” since it doesn’t care where any of us thinks it might be heading.

 

[Tek]

@csricksdds you are one of my "Guiding Light" in understanding the stock market!
Thank you!!

 

[csricksdds]

@csricksdds you are one of my "Guiding Light" in understanding the stock market!
Thank you!!

Thank you for those kind words...and always keep back-up batteries for your light!

 

[kiruba26]

@csricksdds - Thank you for this great study. I tried for the last 45mts and made $250. Appreciate your efforts in sharing your knowledge with this wider group

 

[csricksdds]

Way to go! Just don't make it in the morning and give it back in the afternoon....I'm glad you like my new Trading Path Set-up and hope it continues to work for you!!!

 

[Arun85]

AGAIG: THE TRADING PATH CHART FOR THINKORSWIM

THIS CHART HAS NO CANDLES – INDICATORS ONLY!​

There may be other chart setups that don’t use candles, but this is my first using indicators alone. The top labels are fairly straightforward. I have added the DMI MTF (a free indicator from TI for which I added the Cyan Header).

This chart is called THE TRADING PATH CHART using HEAVY RED/GREEN ARROWS comprising “THE PATHWAY”. THE THICK RED/GREEN ARROWS ARE THE TRADING PATH. The thinner line is the EMA (Exponential Moving Average Price Line) and shows its relation to the solid White 20 EMA.

The SOLID Red/Green horizontal thick line shows Reversal Pivot Points on the chart and works with my Short/Long (possible) transition Bubbles.

The Price Pointer (on the chart) shows actual price movement.

The Yellow Dotted Dashed Line on the chart corresponds with the PSAR (Parabolic Stop and Reverse) Label showing number of bars since Last Direction Transition.

Added are the high/low 1 SD horizontal lines (frequent turning points), as well as my HiAlgoPivot (Red Solid Line)and LoAlgoPivot (Green Solid Line) Pivot Points. The PDHi (Previous Days High) and PDLow (Previous Days Low) are shown as White Lines .

Support/Resistance is shown as a Red/Green Cloud area.

Also added are SD (Standard Deviation) Vertical Lines: The RED Vertical Dashed Line shows when the stock or ETF has reached a +2.5 SD Extension (EXT UP +2.5 SD) and may be nearing a transition down; the GREEN Vertical Dashed Line shows a -2.5 SD Extension Down (EXT DOWN -2.5 SD) and may be nearing a transition up. These do not paint unless those levels are reached.

Also shown as Vertical Lines are: MARKET OPEN (Yellow); UK MARKET CLOSING 10 MIN (White); and POWER HOUR HEADS UP (White).

This should cover everything. I have been putting this together for two weeks without any losing days. If you can’t live without candles you can go to Added studies and strategies and delete AsGood_CancelCandles_Lines.

The link for this single chart is: http://tos.mx/!TS3r3Zq1

The link for a dual chart is: http://tos.mx/!Th3UlF9s

Picture Single Chart:

https://imgur.com/a/hO2eyFK

Picture Double Chart:

https://imgur.com/a/zhuAqhY

Do u mind explaining a bit more on your new SD deviation?
How is this different compared to your own CSR buy/signal with tenkan/kijun period cross, besides change in ATR value from 2.0 to 2.5?

Do u recommend using both to see if they both line up for better entries?

I tried adding both indicators and they both triggered almost at the same time.

Also, is there a way to show price/value on that vertical line when it plots?

I know u have stated that it doesn't repaint unless that area/point/zone gets breached, so that a good area to place your stop?

I trade on 10/15mins chart, so is it ideal to keep the current setting as default?

I know I have asked too many questions.
Just trying to figure out how really this indicator works. Sorry...

 

[csricksdds]

Do u mind explaining a bit more on your new SD deviation?
How is this different compared to your own CSR buy/signal with tenkan/kijun period cross, besides change in ATR value from 2.0 to 2.5?

Do u recommend using both to see if they both line up for better entries?

I tried adding both indicators and they both triggered almost at the same time.

Also, is there a way to show price/value on that vertical line when it plots?

I know u have stated that it doesn't repaint unless that area/point/zone gets breached, so that a good area to place your stop?

I trade on 10/15mins chart, so is it ideal to keep the current setting as default?

I know I have asked too many questions.
Just trying to figure out how really this indicator works. Sorry...

Thanks for your response and questions (sorry, but I was busy yesterday).
Read the detailed explanation here: https://usethinkscript.com/threads/agaig-the-trading-path-chart-for-thinkorswim.18961/#post-142899

If I left a stone unturned, reply back, and I will try to better explain.

 

[MerryDay]

If you read nothing else today, read this:
https://usethinkscript.com/threads/agaig-the-trading-path-chart-for-thinkorswim.18961/#post-142899

It provides a concise explanation as to the importance of:

• never blindly following a random arrow/trigger that shows up on your chart.
• utilizing support & resistance.
• looking for confirmation from your other indicators.
• more importantly, understand the concepts that are being used in this and the other AGAIG setups. Making sure that the overall chart is in support of that strategy.
• why repainters do not have to be considered "inherently bad". When used along with non-repainters and with strong risk-management.

This is a read for every active retail trader.
If you have not seen the other As Good As It Gets Chart Setups;
Here they are, sorted by popularity:
https://usethinkscript.com/search/1...1&c[nodes][0]=5&c[title_only]=1&o=replies&g=1

 

[csricksdds]

If you read nothing else today, read this:
https://usethinkscript.com/threads/agaig-the-trading-path-chart-for-thinkorswim.18961/#post-142899

It provides a concise explanation as to the importance of:

• never blindly following a random arrow/trigger that shows up on your chart.
• looking for confirmation from your other indicators.
• more importantly, understand the concepts that are being used in this strategy. Making sure that the overall chart is in support of that strategy.
• why repainters do not have to be considered "inherently bad". When used along with non-repainters and with strong risk-management.

This is a read for every active retail trader.

You’re kind!

 

[Arun85]

Thanks for your response and questions (sorry, but I was busy yesterday).
Read the detailed explanation here: https://usethinkscript.com/threads/agaig-the-trading-path-chart-for-thinkorswim.18961/#post-142899

If I left a stone unturned, reply back, and I will try to better explain.

Thanks for the detailed explanation! I have been following u lately and some of the indicators u have there, that i got familiar with, are golden. Thanks again for sharing ur ideas and may god bless u!

 

[apdusp]

This eighty-year-old man doesn’t have all the answers, so let’s just delve into some concepts. It’s the “concepts” that are most important (rather than the inner workings of a particular indicator).

I live here in The Villages, Florida and if I want to go to Orlando there are multiple ways to get there, but the destination always remains the same.

Our destination in the stock market works essentially the same as well. Our goal (destination) is to generate income trading options (or stocks). There are multiple ways to generate income (reach our destination) but, according to statistics, only about 10% of options traders accomplish this goal on a regular basis. Indicators, in essence, become our GPS (Global Positioning System) for finding The Right Trading Pathway.

Our bottom line then is to “follow the money” which means finding the “direction” where money is flowing. Thankfully, the market only moves in three directions, UP, DOWN, or SIDEWAYS. Money flows in, out, or stays rather static, causing the security price to go up, down, or sideways.

In order to have an “edge” in trading, we need an indication to where the market is heading and what its next move might be (thus the development of indicators). Daytraders (like myself) are looking for moves over a short period of time. Other traders (swing, or long term) are looking for trends over longer periods of time.

Cyclical: First, the market is set up mathematically using the bell curve we all learned about in High School. The Bell Curve consists of Standard Deviation Movements away from the mean. Since the market can only function mathematically, it is designed to move within 1 SD (One Standard Deviation) of the mean approximately 80% of the time. Option pricing is set based on that one standard deviation (taking into consideration volatility, time, and a few Greeks thrown in for good measure). This leaves 20% of the time for a Stock (ETF) to break-out above/below these levels.

Some trader “guru’s” (whatever a guru is) discuss what they consider to be “Rubber Band Trades.” These are merely trades that are “stretched” above/below their normal trading range, and are stretched like a rubber band that wants to go back to its original position (moving back to the mean).

Now let’s look at the Vertical Dashed SD Lines on my chart. Mine are set at 2.5 (or 2.75) looking for times when the security being traded is stretched to a point where it usually makes a change in direction and heads back towards its mean.

These Vertical Lines are not trading points for me. They represent a “heads up” that a change in direction may be imminent.​

Some other charting setups use “levels” as turning points. These levels are usually Fibonacci based (5, 8, 13, 21, 34, 55 etc.) and are known as frequent turning points (pivots) for the market.

My preference is to use multiple indicators in my charting, all designed to help find probable changes in direction from “multiple” slightly different perspectives.
When a Vertical SD line appears, I then look for a Short/Long Bubble, and then a Red/Green arrow, each suggesting a change taking place. I also look at my top labels to see what direction looks like from their perspective.

I only place a trade when multiple indicators are in agreement (my “edge” in trading).​

Since the market has a mind of its own, these indicators will sometimes “repaint” or even disappear.
If they disappear, I will frequently close my trade and re-enter at a later time (risk management).

MANY prefer oscillators which don’t repaint
(although oscillators will also immediately change direction at the will of the market, they just show the path behind their move).​

The TTM Trend Label at the top of my chart is oscillator based and shows Red/Green for direction, or Yellow when no direction (chop) is established.

The PSAR (Parabolic Stop and Reverse) shows where direction last changed overall.

The price/value of the SD Line is where the thin price line is crossing it. Place your pointer at that point and look to the far right to see what that price was.

It’s the concepts we need to know and understand. Once we understand some trading concepts and understand that multiple indicators are looking at direction from different perspectives, we can then pick a chart set-up that best fits our eye to help point us in the right direction.

In any case, “let the market lead” since it doesn’t care where any of us thinks it might be heading.

small correction: "to move within 1 SD (One Standard Deviation) of the mean approximately 80% of the time" should be 68% of the time within the range

 

[csricksdds]

Thanks for the detailed explanation! I have been following u lately and some of the indicators u have there, that i got familiar with, are golden. Thanks again for sharing ur ideas and may god bless u!

Kind words and I thank you for all of them and may you be blessed as well!

small correction: "to move within 1 SD (One Standard Deviation) of the mean approximately 80% of the time" should be 68% of the time within the range

Research shows that stocks stay within the one standard deviation (68%) about 80% of the time and 20% of the time above/below that 68% (a bit confusing huh?).

 

[useThinkScript]

Updated!
The shared chart link has been updated in the first post: http://tos.mx/!95YjmEow
The code has been tweaked to optimize the use of resources.
NONE of the functionality of the chart changed!


Keep in mind: Each time, you import a shared chart link, you are adding custom indicators to your library, potentially creating a lag into the performance of your charts.
read more:
https://usethinkscript.com/threads/shared-chart-links.19005/

 

[apdusp]

Kind words and I thank you for all of them and may you be blessed as well!

Research shows that stocks stay within the one standard deviation (68%) about 80% of the time and 20% of the time above/below that 68% (a bit confusing huh?).

was not aware of that . by any chance can you point to where I can find that type of research? or regarding mean reversion if you have seen some?

I know real life is not a simplified statistical model approximation, but just curious on the 80% as I never heard about

 

[csricksdds]

I know real life is not a simplified statistical model approximation, but just curious on the 80% as I never heard about

I’ve followed John Carter for years and he has stated that many times. I would have to go on a hunt to find his quote if you want me to do so?

 

[apdusp]

I’ve followed John Carter for years and he has stated that many times. I would have to go on a hunt to find his quote if you want me to do so?

not necessary. thanks for pointing that

 

[csricksdds]

not necessary. thanks for pointing that

Thanks - I also emailed the original developer of TOS and he sent an answer which I followed up on to be sure. This was my follow up to him:

"Sorry to bother again. I want to make sure my thinking matches your reply?

So, if we have a track that is 1,000 yards long and 1 SD represents 680 yards. As an "option" I make it to the 680 yard line about 80% of the time but, after a few cups of coffee, I am able to cross that 680 yard line about 20% of the time?"

This was his answer:

"Exactly! You are spot on…."

 

[csricksdds]

Here is link with VWAP added to the chart. Refer to my tutor on Daytrading the VWAP in ThinkOrSwim posted last night at 11:01 p.m.

http://tos.mx/!cypFFgGo
VWAP is the gold triangles

 

[vinvin]

@csricksdds, Thank you for sharing this setup! Could you kindly point out which all indicators in this shared chart contribute to the color changing arrow line and the long / short label signals. I can try but fear of not including the correct ones takes over!