Options momentum

[SJP07]

I day trade/swing trade options but sometimes gets chopped out. Are there any recommendations strategies/indicators to help me better time my trades? I sometimes use the relative momentum index, but I'm looking for something more reliable. Thanks in advance!

 

[michalg95]

Would love to hear more about this! I am struggling a bit too..

 

[charlie2598]

Would love to hear more about this! I am struggling a bit too..

learn to trade price action.
and moving average crossover and Rsi or Macd help lot.

 

[shop00]

i'm looking for some indicators too for option trading. I have used MACD crossover along with RSI on a 5 min and 10 min timeframe, but that gave me a wrong signal on ROKU and ZM on 12/17 resulting in a heavy loss. What indicators do you use for day trading options?

 

[natcom2020]

when price get out of the accumulation stage if you buying calls. when you see a downtrend then price goes sideways then get out of that sideways range you go long. and the other way around for puts.

 

[charlie2598]

i'm looking for some indicators too for option trading. I have used MACD crossover along with RSI on a 5 min and 10 min timeframe, but that gave me a wrong signal on ROKU and ZM on 12/17 resulting in a heavy loss. What indicators do you use for day trading options?

before entering the trade confirm on higher time frame minimum 30min time frame give signal on macd or rsi. also check the divergence to and how long you carry your trade ?

 

[michalg95]

This one seems to be good one. Buy when 5 min confirmation 9 and 3 SMA crosses. Breaks ATR Fib and enter call on the 1 min.
https://usethinkscript.com/threads/...the-money-option-in-strategy.9180/#post-84759

 

[SJP07]

i'm looking for some indicators too for option trading. I have used MACD crossover along with RSI on a 5 min and 10 min timeframe, but that gave me a wrong signal on ROKU and ZM on 12/17 resulting in a heavy loss. What indicators do you use for day trading options?

Thanks @charlie2598 - I've been focusing more on price action using support and resistance. It's bought me some success, but I'm looking for an indicator to help filter out consolidation. I'm usually right on direction, but enter a trade way too early, sell at a small loss only to miss out in a few minutes.

@shop00 - I mainly rely on the RMI indicator. It works great for trend direction, but not so much entries/exits. I don't use MACD or RSI anymore for trading because of those false signals. I do use them for analysis though, just not to enter or exit a trade. Even EMA's aren't reliable in my opinion.

Thanks @michalg95! I'll be sure to check and test it out!

 

[bigverm23]

Thanks @charlie2598 - I've been focusing more on price action using support and resistance. It's bought me some success, but I'm looking for an indicator to help filter out consolidation. I'm usually right on direction, but enter a trade way too early, sell at a small loss only to miss out in a few minutes.

@shop00 - I mainly rely on the RMI indicator. It works great for trend direction, but not so much entries/exits. I don't use MACD or RSI anymore for trading because of those false signals. I do use them for analysis though, just not to enter or exit a trade. Even EMA's aren't reliable in my opinion.

Thanks @michalg95! I'll be sure to check and test it out!

How are you setting your stop loss? Or are you not and panicking when you see the prive start reversing?

 

[SJP07]

How are you setting your stop loss? Or are you not and panicking when you see the prive start reversing?

I use a mental stop loss. I haven't learn to set orders with stop losses, yet. If the momentum starts going against my trade, I exit.

 

[bigverm23]

I use a mental stop loss. I haven't learn to set orders with stop losses, yet. If the momentum starts going against my trade, I exit.

What's the mental stop loss? What I've learned quickly is to set a top loss based on the market price of the stock....usually a recent level, and stick to it. Otherwise I was panicking and bailing out too quickly .

 

[bigverm23]

I'd recommend Mobius SuperTrend paired with something like TTM Squeeze or MACD w/Bollinger.

Quite a few people recommend just using moving averages and support/resistance levels but I haven't figured that out yet being new myself.

Lastly, pick one or two stocks (I like SPY/SPX) and trade those only.

 

[bigverm23]

This one looks very promising as well

https://usethinkscript.com/threads/balanced-bb-breakout.5708/

 

[SJP07]

What's the mental stop loss? What I've learned quickly is to set a top loss based on the market price of the stock....usually a recent level, and stick to it. Otherwise I was panicking and bailing out too quickly .

It depends on volatility at the time. There's times where I just bought too early my technical analysis indicates that it will move my direction. In those instances my mental stop loss is at 20% (pretty high). But if my technical analysis indicates that I bought at a reversal point, I exit right away.

I've used that script before - it's great! but I've been looking to focus more on a clean, less noisy indicator that allows me to focus more on price action.

Thanks for the supertrend recommendation! Funny thing you mention the SPY because that's what I've been focusing on the past few weeks!

 

[shop00]

Thanks @charlie2598 - I've been focusing more on price action using support and resistance. It's bought me some success, but I'm looking for an indicator to help filter out consolidation. I'm usually right on direction, but enter a trade way too early, sell at a small loss only to miss out in a few minutes.

@shop00 - I mainly rely on the RMI indicator. It works great for trend direction, but not so much entries/exits. I don't use MACD or RSI anymore for trading because of those false signals. I do use them for analysis though, just not to enter or exit a trade. Even EMA's aren't reliable in my opinion.

Thanks @michalg95! I'll be sure to check and test it out!

Thanks @SJP07. Looking for some indicators as i mostly do options trading.

 

[SJP07]

Thanks @SJP07. Looking for some indicators as i mostly do options trading.

I'll be more than happy to share what I use and why. For starters, I use two charts because I want to keep my charts as clear as possible.

• Pre-market high and low: I notice that pre-market levels serve as heavy support/resistance levels. Here's a script I found here that automatically plots them: Pre-market After-market For ThinkOrSwim
  • From there I draw horizontal trend-lines connecting the two highest points together and the two lowest points. I find that also predicts future support and resistance.

• Ichimoku cloud: a great visual of current and future support and resistance. I only use the cloud and the chikou line. This indicator is already on TOS.

• Pivot points: This is also a great S/R tool. I mainly use this to decide when or even if I should get into a trade. Here's the link Traditional Pivot Points

• Relative momentum index: I use this to gauge the overall strength of the trend. This has saved me countless of times when I expect the market to go my way, but see the momentum starts to change before the actual price. This indicator is already on TOS.

• Lastly, this may be the best 'EMA' style indicator I've ever come across. Incredible accurate. I use this to confirm entry and exits. I still use other traditional EMA's once in a while, but nothing I've come across beats this. It's a shame that there's no scanner for it. Here it is: Ehler's MAMA Buy and Sell.

As you could see most of these indicators are S/R indicators. I find those work best because you always want to buy where there's heavy support and sell into heavy resistance.

Let me know if you have any questions