Finding stocks on sideways trend

[8Nick8]

Hi all, i am learning to trade options by selling cash secured puts to collect premiums. May i know how to customise a scanner to scan for stocks that are on sideways trend for at least 30days? Or any recommendations that can generate a list stocks with good premiums to sell puts are welcomed.

Thank you

 

[rad14733]

@joe362 What you are looking for is a script that identifies ranging, choppiness, or consolidation... A potential option is the TTM_Squeeze indicator which, by default, is geared towards consolidation (ranging and choppiness) as well as the momentum of exiting consolidation...

 

[joe362]

@MerryDay @rad14733
Nvm, sorry to ask a stupid question.

 

[MerryDay]

@joe362 I don't think it was a stupid question. As traders gain experience, recognizing sideways action is important to most strategies either to avoid or for a heads up that something might be on the horizon. Who knows you might define the next great indicator. But the devil is in the details. Everything in thinkscript has to be able to be defined mathematically.
You are saying you want to look at the change from candle to candle over a certain amount of candles. There are scripts that use the sum series function or create a percentage as in if the last candle is within .01% of the current or use a standard deviation if the candles don't deviate x amount from each other. Play with the math. Look at the candles you want to identify what is their ratio to each other? If you look at another chart, is the ratio the same? It might take a bit of research but once you know what you want to ask, there is probably a snippet out there that will do it.

PS: Did you look at this indicator?
https://usethinkscript.com/threads/choppiness-index-indicator-for-thinkorswim.1277/#post-2880
This script uses a range. Change the last number in the study and you can determine the range the candles have to be to each other to be called sideways.

 

[ziongotoptions]

Hi @BenTen, thank you for responding to my question.

With my little knowledge and my definition of sideways trend, i am looking at the price movement in a consolidation pattern, 30 days is arbitrary number, as i presumed that is where the trend has stabilised. I hope to use a scan to find such setup with good premiums and IV

So my plan is to find good stocks that i am prepared to own, then sell puts when price comes close to bottom channel to collect premium and if i am assigned, i will do covered call.

Thank you once again for helping me.

What indicator is this?

 

[MerryDay]

@ziongotoptions That is a photoshopped chart. The poster was asking to identify the highlighted areas of sideways trend. Refer to the post above your post for a study that highlights candles in a choppy market.

 

[ziongotoptions]

@ziongotoptions That is a photoshopped chart. The poster was asking to identify the highlighted areas of sideways trend. Refer to the post above your post for a study that highlights candles in a choppy market.

thank you, i looked at the post, i see its for lower study, is there one like horserider shared that highlights the entire range ?

 

[MerryDay]

@ziongotoptions Look again. The study does the same thing as @horserider's example. It paints the candles of the entire range. If you read her post that was her whole point.