High-Low Range Chart Setup For ThinkOrSwim

OGOptionSlayer

Active member
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How do I change the colors of the bars signaling to buy a call/put?

and @OGOptionSlayer , are you primarily trading SPX options with a delta of 0.7?
I didn't answer your delta of .7. The reason why you do this is that you aren't getting eaten up by premiums and there is more actual intrinsic value in the contract. I would rather take less positions and have way less premium decay than have 40 contracts that get melted away as they get closer to expiry.

Most successful traders do not trade OTM option contracts. There simply isn't enough value in them as you are paying way too much for premiums and ultimately this affects your P/L in the short and long term. Go with .7's and see the difference.

One thing you will notice delta 70's also is that your palms don't sweat as much, you don't get as frustrated, and you can focus on your actual strategy and setups much more clearly.
 

OGOptionSlayer

Active member
VIP
Pretty soon, I'm going to get with @Chemmy and work through some things I want to add to the indicator that will provide more confluence so you only get into the trades that have around a 70% win rate with average long-term profitability above 20%. This will be supported by the data, not just idle words.

If we are successful, we will have one of the only indicators on the market, completely free to our community, that has this success. I have research theses that I have been reading that I gained this knowledge from and they used over 6k different strategies.

While this indicator is game-changing if used properly, it's about to become a beast. I've done extensive research and have been manually backtesting this strategy combined with the indicator and it does a vast improvement to its success rate.
 
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iSul

Member
Thank u so much for this effort .
you said :
15 min bar count to 20 bars
1 hour change the bar count to 10 bars
week change the bar count to 5 bars
according to this we have to change the bar count in watchlist code . !


and what's the best timeframe that you are using most of the time .
 

OGOptionSlayer

Active member
VIP
Thank u so much for this effort .
you said :
15 min bar count to 20 bars
1 hour change the bar count to 10 bars
week change the bar count to 5 bars
according to this we have to change the bar count in watchlist code . !


and what's the best timeframe that you are using most of the time .
Currently, I'm finding the 30m to be highly successful and prevent from getting faked out. I use it on futures and stock option contracts.
 

culturalroots

New member
I didn't answer your delta of .7. The reason why you do this is that you aren't getting eaten up by premiums and there is more actual intrinsic value in the contract. I would rather take less positions and have way less premium decay than have 40 contracts that get melted away as they get closer to expiry.

Most successful traders do not trade OTM option contracts. There simply isn't enough value in them as you are paying way too much for premiums and ultimately this affects your P/L in the short and long term. Go with .7's and see the difference.

One thing you will notice delta 70's also is that your palms don't sweat as much, you don't get as frustrated, and you can focus on your actual strategy and setups much more clearly.
Thank you for the informative response and totally make sense. What is your average DTE for option plays? A week, a month, or etc. out
 

OGOptionSlayer

Active member
VIP
Thank you for the informative response and totally make sense. What is your average DTE for option plays? A week, a month, or etc. out
It's really more of what risk am I willing to accept. With 70 deltas, you leave yourself in a much better position than you would with even a 0DTE contract. I have started to play 0dte's more often but with 70 deltas because you aren't getting priced out by premiums. I look at the flow using Unusual Whales and Tradytics. I find both give me a better view than using just one. Unusual Whales has great flow information while Tradytics I use more for analytical information like GEX and Darkpool levels.

So if I'm in a market that has 0dte, I always look at the flow for 0dte because that's where I'm going to see those >$50k OTM contracts being taken that tell me there is a good chance we are going there before the market closes that day. Doesn't always happen but no trade strategy ever produces 100% returns but using flow for directional bias is key.

The reason I say 70 deltas is because you aren't just paying for premium and the contract won't lose value, plus you have a 70% chance of finishing in the money which means you won't lose your entire amount on that play. It's kind of like a built-stop loss where you usually at least prevent yourself from losing the entire amount.

I trade SPX and SPY a ton so I typically am only taking plays 1 or 2 days out. If I swing, I try to swing on Monday's and let it play through until Friday. I don't like holding over the weekend. I use that time for futures.
 

OGOptionSlayer

Active member
VIP
This indicator is killer on 15m and 30m timeframes. If you are wondering about what moving averages I'm currently using, I have found the most confluence with 13 ema and 48.5 ema. Also, when combined with a reversal candle and I see movement in relative volume, especially if we are in the 2.0 and higher range, I'm always in that move.

Colombia University tested the best moving averages and found the 13 and 48.5 to be the most accurate when predicting price movement, especially with reversals. I have been using these instead of my 10SMA and 50SMA lately and I'm loving it.

This is the 15m chart that caught a 4 pt move on AAPL. The 30m caught a 5.76 move.

 
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OGOptionSlayer

Active member
VIP
Thank u so much for this effort .
you said :
15 min bar count to 20 bars
1 hour change the bar count to 10 bars
week change the bar count to 5 bars
according to this we have to change the bar count in watchlist code . !


and what's the best timeframe that you are using most of the time .
Yes, you will definitely want to adjust your watchlist column to be set on the timeframe you are using. Timeframes are fractal and will produce independent results even if the stock is trending in one direction or the other.
 

Focus

Member
This indicator is killer on 15m and 30m timeframes. If you are wondering about what moving averages I'm currently using, I have found the most confluence with 13 ema and 48.5 ema. Also, when combined with a reversal candle and I see movement in relative volume, especially if we are in the 2.0 and higher range, I'm always in that move.

Colombia University tested the best moving averages and found the 13 and 48.5 to be the most accurate when predicting price movement, especially with reversals. I have been using these instead of my 10SMA and 50SMA lately and I'm loving it.

This is the 15m chart that caught a 4 pt move on AAPL. The 30m caught a 5.76 move.

Is the 48.5ema on your chart custom? Last week, I tried to set the EMA to 48.5 but it came out as a whole number.
 

OGOptionSlayer

Active member
VIP
Is the 48.5ema on your chart custom? Last week, I tried to set the EMA to 48.5 but it came out as a whole number.
Got it. It has to be customed.
Yep it is customed and I honestly don't think it's that big of deal. I just like the fact they pointed out that .5 because well I don't know but every study thinks it's important to put it in there. Not the research I read but wanted to find an article to show you why I'm using it. When they cross, it produces the greatest returns for short to long-moving average crossovers. I'm hoping Chemmy and I can build this somehow in the indicator.

https://news.yahoo.com/study-determ...Dl-Py5mGlZ8STNHZYLsm7415iLpCoUD_E74igIwBhL5cX
 
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Trader Raider

Well-known member
VIP
When they cross, it produces the greatest returns for short to long-moving average crossovers.

https://news.yahoo.com/study-determ...Dl-Py5mGlZ8STNHZYLsm7415iLpCoUD_E74igIwBhL5cX

Please correct me if I'm wrong, but I believe the study looked at buying and liquidating long positions on a daily timeframe. I missed it if they looked at shorting and intraday timeframes. From my backtesting, the best averages for longs are often very different than the best ma crosses for shorts. But I'm not using 300 years of data as the study did.

Best wishes and happy trading.
 

OGOptionSlayer

Active member
VIP
Please correct me if I'm wrong, but I believe the study looked at buying and liquidating long positions on a daily timeframe. I missed it if they looked at shorting and intraday timeframes. From my backtesting, the best averages for longs are often very different than the best ma crosses for shorts. But I'm not using 300 years of data as the study did.

Best wishes and happy trading.
The best intraday moving average is typically considered the 14 day ema. I use 13 because if you look on platforms like Twitter and many other different traders, they usually reference the 13 and I believe the 13 has replaced the 14 in usage. So I try to use the ema's that the traders use and I know the 13 and 48 are really popular and I've seen big bounces off of those in both directions. You can really count on the 13 ema with this strategy imho and use the 48 as stop loss on calls and reverse that on puts. So far, that's what I've been doing and it's working well.
 

iSul

Member
I think watchlist needs to be modified .. this day show me green signal with numbers of candles but when I checked the chart it is bearish and the numbers of candle not true . just an ex QQQ ..
 

OGOptionSlayer

Active member
VIP
I think watchlist needs to be modified .. this day show me green signal with numbers of candles but when I checked the chart it is bearish and the numbers of candle not true . just an ex QQQ ..
Is your watchlist column set on the timerfame you are looking for? Check this by right-clicking the Hi-Lo column on your watchlist and up in the left corner will be your timeframe. Let me know if this helps or if it's an actual bug. I use the watchlist column and it works for me but I have seen inconsistencies in it.
 

Gssound

New member
Yep it is customed and I honestly don't think it's that big of deal. I just like the fact they pointed out that .5 because well I don't know but every study thinks it's important to put it in there. Not the research I read but wanted to find an article to show you why I'm using it. When they cross, it produces the greatest returns for short to long-moving average crossovers. I'm hoping Chemmy and I can build this somehow in the indicator.

https://news.yahoo.com/study-determ...Dl-Py5mGlZ8STNHZYLsm7415iLpCoUD_E74igIwBhL5cX
Why not use Satys ribbon and change it to 12 and 48 works good along with the confirmation arrow as well
 

Focus

Member
@OGOptionSlayer On the right chart is 10SMA / 50 SMA, and on the left chart is 13EMA / 48.5EMA. The SMA shows the bars crossed are 7 and the EMA shows the bars crossed are 2. If the EMA weighs current prices. Is there a reason why the EMA crossover is behind the SMA?

8dPL2vD.jpg
 
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OGOptionSlayer

Active member
VIP
@OGOptionSlayer On the right chart is 10SMA / 50 SMA, and on the left chart is 13EMA / 48.5EMA. The SMA shows the bars crossed are 7 and the EMA shows the bars crossed are 2. If the EMA weighs current prices then the reason why the EMA crossover is behind the SMA?

8dPL2vD.jpg
It more relates to how the current price action has been. Even though the 48 ema takes into account more short-term information, it's still a long-term trend (almost 50 days like the 50 SMA). The 10 SMA is still shorter than the 13 EMA. Since we have been going up in price, the ema is considering that in its algorithm thus causing the 10 SMA to cross prior to the 13 EMA even though the EMA's are typically more useful in short term trends.
 

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