Profitable day trading strategy for ThinkorSwim users?

Zedd

New member
Can someone share me with a day trading strategy that has worked for them. I have tried many strategies and used many indicators but ended up losing trades or the strategy didn't work good enough backtesting.
 

STB

Member
With 22yrs of trading IMO, moving averages and most indicators are all lagging. Using support and resistance levels and market profile especially for futures is the only way to go for placing buy or sell orders.
 
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QUIKTDR1

Member
VIP
I have been trading over forty years (yeah oldy ,moldy) . All of the previous posts present very poignant points. Do not take them lightly. Get yourself a composition book and write down specific points and then go over them and see if they are applicable to your personality.
I was a member of the NYSE and I traded OEX a lot. They were very popular and very liquid at the time, being young with other sources of income I was able to extend my risk spectrum. I continue to add newer applications to my arsenal in order to improve my strategies. You must first assess who you are, how much risk you can take without blowing up and recognize that you can be right 50% or less as long as your gains outweigh your losses, preferably by 1 1/2 - 2 x.
You must not enter this field thinking that your going to catch the next GME. This is not easy it requires dedication, research, flexibility and extreme discipline to stick with YOUR rules. You must also have extreme self-confidence as this is like waves from the ocean. Sometimes you can ride them and other times you have to avoid them. Don't expect to reach the top of the mountain immediately it is a journey of many steps but once you get there it's a great view, until the next mountain. Good Luck read all previous posts, they are filled with gems formed from experience and common sense.
 

rogtrader

Member
Hello Guys,

I have tried quite a few indicators, but I still lose money in day trading high momentum stocks. What are the indicators we should use on second charts?

Thanks!
 

MerryDay

Administrative
Staff member
Staff
VIP
Lifetime
@rogtrader You are almost asking good questions. You DEFINITELY need to use multiple charts on different time frames to confirm your strategy.
As to what indicators, AGAIN, you need to commit to a strategy: Opening Breakout, Gap Up, Golden Cross, etc to determine what indicators would be appropriate.

FYI, it can be poor etiquette to ask the same question in multiple posts. If you have new questions, add them to your original post.
 
There is a trend reversal indicator in the scalping section I like to use but I only use it with stocks I know. (Not stock advice) If you look at NIO today 3/13/2021 on a 2 minute time frame once the reversal pops up it's confirmed by the 9 SMA crossing above or below the 15 SMA. It does repaint/show and go away sometimes. I use the one with arrows that was shared down in the post. Like most people said in here you still need to know how to read the charts. Because this indicator doesn't seem to work well with every single stock I had to find a few favorites and your favorite timeframe also.
 

rogtrader

Member
There is a trend reversal indicator in the scalping section I like to use but I only use it with stocks I know. (Not stock advice) If you look at NIO today 3/13/2021 on a 2 minute time frame once the reversal pops up it's confirmed by the 9 SMA crossing above or below the 15 SMA. It does repaint/show and go away sometimes. I use the one with arrows that was shared down in the post. Like most people said in here you still need to know how to read the charts. Because this indicator doesn't seem to work well with every single stock I had to find a few favorites and your favorite timeframe also.
Which one is it?
 
Which one is it?
Another great one also that I will use. I found this one Saturday night and it seems to be great so far!!!!!!!!!!!!!!!

Code:
#Heiken_Ashi based on Sylvan Verboort's Trading with HA Candlestick Oscillator
#Bon Bon _last update Jan 17th 2021
#Influenced by script from HoboTheClown / blt,[URL]http://www.thinkscripter.com[/URL], TD Hacolt etc.
#MTF based on HannTech's MTF_MACD script
#update 1/2/21 - changed the default moving average to TEMA.  Changed the period to 35.
#update changed reversal arrows to reversal bubbles with price

### YOU MUST HAVE THE STYLE SETTING FIT STUDIES ENABLED ###
#hint: The style setting Fit Studies must be enabled to use these bars.


input period = 50;
input hideCandles = yes;
input candleSmoothing = {default Valcu, Vervoort};
input show_bubble_labels = yes;
input bubbles = yes;
input arrows = yes;


#input smoothingLength = 3;

input movingAverageType = {default  TEMA, Exponential, Hull };

def openMA;
def closeMA;
def highMA;
def lowMA;

switch (movingAverageType) {
case Exponential:
    openMA = CompoundValue(1, ExpAverage(open, period), open);
    closeMA = CompoundValue(1, ExpAverage(close, period), close);
    highMA = CompoundValue(1, ExpAverage(high, period), high);
    lowMA = CompoundValue(1, ExpAverage(low, period), low);

case Hull:
    openMA = CompoundValue(1, HullMovingAvg(open, period), open);
    closeMA = CompoundValue(1,  HullMovingAvg(close, period), close);
    highMA = CompoundValue(1,  HullMovingAvg(high, period), high);
    lowMA = CompoundValue(1,  HullMovingAvg(low, period), low);

case TEMA:
    openMA = CompoundValue(1, TEMA(open, period), open);
    closeMA = CompoundValue(1, TEMA(close, period), close);
    highMA = CompoundValue(1, TEMA(high, period), high);
    lowMA = CompoundValue(1, TEMA(low, period), low);

}


HidePricePlot(hideCandles);

def haOpen;
def haClose;

switch (candleSmoothing){
case Valcu:
    haOpen = CompoundValue(1, ( (haOpen[1] + (openMA[1] + highMA[1] + lowMA[1] + closeMA[1]) / 4.0) / 2.0), open);
    haClose = ((((openMA + highMA + lowMA + closeMA) / 4.0) + haOpen + Max(highMA, haOpen) + Min(lowMA, haOpen)) / 4.0);
case Vervoort:
    haOpen = CompoundValue(1, ( (haOpen[1] + (openMA[1] + highMA[1] + lowMA[1] + closeMA[1]) / 4.0 ) / 2.0), open);
    haClose = ((((openMA + highMA + lowMA + closeMA) / 4.0) + haOpen + Max(highMA, haOpen) + Min(lowMA, haOpen)) / 4.0);

}

plot o = haOpen;
o.Hide();

def haLow =  Min(lowMA, haOpen);
def haHigh = Max(highMA, haOpen);

#Zero Lag System - MetaStock Crossover Formula
#zero-lagging principle
#Zero-lagging TEMA average on closing prices

#Medium-term price reversals - upward trend

def avg = 34;
def TMA1 = reference TEMA(haClose, avg); # triple exponential moving average (TEMA) of 34 bars
def TMA2 =  reference TEMA(TMA1, avg);
def Diff = TMA1 - TMA2;
def ZlHa = TMA1 + Diff; #Zero-lagging TEMA average on closing prices - medium term uptrend;

#Medium-term price reversals - downward trend
def TMA1_ = reference TEMA((high + low) / 2, avg);
def Diff2 = TMA1_ - TMA2;
def ZlCl = TMA1_ + Diff2; #Zero-lagging TEMA average on closing prices - medium term doenwardtrend;

def ZlDif = ZlCl - ZlHa; # Zero-Lag close - Zero-Lag HA(green candle) Uptrend when ZlDif is equal to or greater than zero

#uptrend {green candle}
def keep1 = if (haClose >= haOpen and haClose[1] >= haOpen[1]) then 1 else 0;
def keep2 = if ZlDif >= 0 then 1 else 0;
def keep3 = if (AbsValue(close - open) < ((high - low) * 0.35)) and high >= low[1] then 1 else 0;
def keeping = if (keep1 or keep2) then 1 else 0;
def keepall = if keeping or (keeping[1]) and close >= open or close >= (close[1]) then 1 else 0;

def utr = if keepall or (keepall[1]) and keep3 then 1 else 0;

#downtrend red candle

def keep1_ = if (haClose < haOpen and haClose[1] < haOpen[1]) then 1 else 0;
def keep2_ = if ZlDif < 0 then 1 else 0;
def keep3_ = if (AbsValue(close - open) < ((high - low) * 0.35)) and low <= high[1] then 1 else 0;
def keeping_ = if (keep1_ or keep2_) then 1 else 0;
def dkeepall_ = if keeping_ or (keeping_[1]) and close < open or close < (close[1]) then 1 else 0;

def dtr = if dkeepall_ or (dkeepall_[1] - 1) and keep3_ == 1 then 1 else 0;  #downtrend
def upw = if dtr and (dtr[1]) and utr then 1 else 0;
def dnw = if !utr and (utr[1] ) and dtr then 1 else 0;

def results = if upw then 1 else if dnw then 0 else results[1];

#Change the color of HA and Japanese Candles - turn off to show only HA on chart
#AssignPriceColor(if haClose >= haOpen
                 #then Color.GREEN else
                 #if  haClose < haOpen
                 #then Color.RED else Color.WHITE);


#Heiken_A script

#####################################################################################################
input charttype = ChartType.CANDLE;

def haopen_ = if haClose <= haOpen
              then haOpen + 0
             else Double.NaN;

def HAhi   = if haClose <= haOpen
              then haHigh
              else Double.NaN;

def HAlo =   if haClose <= haOpen
              then haLow
              else Double.NaN;


AddChart(growColor = Color.RED, neutralColor = Color.CURRENT, high = HAhi, low = HAlo, open = haopen_, close = haClose, type = ChartType.CANDLE);

def HAclose1 = ohlc4;
def HAopen1  = if haClose >= haOpen
               then CompoundValue(1, (haOpen[1] + haClose[1]) / 2, (open[1] + close[1]) / 2)  
               else Double.NaN;

def haopen_1 = if haOpen <= haClose
               then HAopen1 + 0  else Double.NaN;

def HAhigh1  = haHigh;
def HAlow1   = haLow;


AddChart(growColor = Color.GREEN, neutralColor = Color.CURRENT,  high = HAhigh1, low = HAlow1, open = haopen_1, close = haClose, type = ChartType.CANDLE);

#####################################################################################################
#Buy and sell signals
def trend =  haClose >= haOpen;
def trendup = trend and !trend[1];
def trendd =  haClose < haOpen;
def trendDown = trendd and !trendd[1];

AddChartBubble(bubbles and trendup and trendup, HAlow1, ("Reversal:"    + round(HAlow1, 2)), Color.GREEN, no);

AddChartBubble(bubbles and trendDown and trendDown, HAhigh1, ("Reversal:"  + round(HAhigh1,2)), Color.LIGHT_RED, yes);

#Arrows instead of bubbles
#def trend = haClose >= haOpen ;
#plot trendup = trend and !trend[1];
#trendup.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_UP);
#trendup.SetDefaultColor(Color.CYAN);


#def trendd = haClose <= haOpen ;
#plot trendDown = trendd and !trendd[1];
#trendDown.SetDefaultColor(Color.MAGENTA);
#trendDown.SetPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_DOWN);
 

sbryanvaughn

New member
appreciate the help. I am interested and trade emini's and stocks only. tried scalping but mostly ends up with loss or even. And then tried to look for intraday trend that I can ride for mins or even hours but its hard to predict. seems like the stock I chose to focus on with all the right indications that It will go my way takes an opposite turn the second I get in the trade.
Zedd, I think everyone has felt that way before at times...so something that has worked well for me (doing the type of trading you are talking about) is using the standard deviation channels (first in tradingview) in Thinkorswim on a 1 or 2 min timeframe. I am actually new to TOS but not to this strategy or trading in general. It just got way easier to do with TOS because the channels are auto calculated and you don't have to do them manually. The theory is that price will not exceed the -2 or +2 standard deviation 97% of the time. So if you watch the channels and wait until a sharp selloff or downtrend and price goes to one of these levels (mainly on an uptrend when the channels are sloping up), you can usually catch a really good bounce off of the -2 or even better the -3 standard deviation level. I use the 1, 2, and 3 channels on my charts in TOS. the idea is that these are low risk high probability entry areas. Even if you don't like trading reversals...say you like to trade patterns, these channels can tell you which patterns are likely to play out. For instance you would not trade a bull flag pattern right under the +1 or +2 levels which can act as resistance. If I trade patterns its always below or at the center line of the channels. There is obviously a lot more to it...like watching the yearly and 180 day levels and marking those on the charts and seeing if they will interact on the intraday chart, etc. If channels are sloping up, my exits are twice oversold, divergence on the RSI, rejection at key levels, or break of obvious trend...if channels are sloping down (and I am going long) I am just looking for a quick scalp and will get out at once oversold on the RSI, and I watch volume like crazy. When I see the sellers step in I will usually get out. But, like the others said, its hard to tell someone a strategy. you have to get into the weeds with it, put in the time, figure out your entry criteria, exit criteria, form a trade plan, and then learn to trade the plan well and not let emotions or decisions weigh into too much. You will literally get decision fatigue and you will start doubting every decision you make. Trading can head knick you for sure. But I will say, of all of the strategies that I have tried, and that is MANY, none of them have come close to this one in terms of reliability. In fact, when i am trading the index ETF's, when they hit a -2 level and the channels are sloping up (indicating a sharp pullback in a bullish day trend) I will back up the dumptruck and buy all I can. Did this today on UPRO (3x leveraged ETF of SPY) and cleaned house.
 

brendel

New member
I have been lurking for months here but figured I would sign up since maybe I can tell you what I do.

Biggest thing no magic indicator or secret that will work all the time. I scalp options, so can only say from that perspective, biggest thing I recommend manage your risk, and have your stop loss set. You are going to lose a lot, but if you manage your risk and stop loss, your winners should outweigh your losers in the long run.

What do I do? I mostly follow only 3-5 stocks, and scalp off of it usually in the first hour, though sometimes I will see something later on. I know those stocks inside and out.

My main strategy? I scalp with the trend. The main indicators I use is EMA 8/21/34, TTM Squeeze, and MACD, also drawing my support/resistance

I use the flexible grid and have 5 charts, one showing the 1 min, 2, min, 5 min, 15 min, and 1 hour.

If there is no squeeze off the open, but I watch futures, if futures are up, usually a good sign the stocks I follow will open green, and I will open a position usually in the first 5-10 minutes. Make sure stop loss are set, and I only pick stocks that have high liquid options, so I can get in and out really fast for example TSLA, AAPL, SPY.

I watch all the timeframes, but will enter and exit based off the 2 min mostly. All the charts are important though to see what is going in multi timeframes. After the open I then watch for a squeeze, when a squeeze happens and close to firing I then enter and ride the momentum. It not perfect and sometimes you don't know exactly what direction the squeeze will go, but you look at EMA, if it stacked and squeeze is showing positive in the histogram very good chance it will go up. If EMA's are above price or crossing it then more then likely I buy puts.

I love to scalp TSLA, while I might only go in for 1 minute to 5 minutes, you can either make a lot of money or lose a lot if you don't set your stop loss.


I also learned a long time ago leaving money on the table is way better then leaving the table broke. Once I got past that I have been doing pretty good overall. As soon as the momentum is slowing down I get out and take my profits. Sometimes I might leave a contact or two, lock in profits and manage with stop loss. Yes many times I could have made way more, but in the past I always got burnt doing that.
 

BonBon

Active member
VIP
@Daughters Keeper thank you for referring to the thread. I made several updates to the code since the first post and other indicators were added to confirm buy and sell signals.

@rogtrader this is the link to the thread. Please ensure you read the entire thread and comments and review the resources(page 5). I hope this helps.

https://usethinkscript.com/threads/completed-heikin_ashi-indicator.5251/

As are reminder always do your own diligence and have a trading plan.

Disclaimer- this is how I use my HA_smoothing indicator and MTF within my trading plan. It works for me. Everyone needs to find what works for them. This indicator is not the holy grail but I have found that combined with fundamentals and technicals it can take away some indecisiveness and keep one in the trade longer. On the flip side it can get you out of a trade and decrease the risk.
 

cabe1332

Active member
All great tips, just want to share my .02 cents. I too have experienced the loss (but not much) and pains (FOMO). The list is all great suggestions. Been trading stocks for 6 months now part-time. Mostly learned from clips from youtube, listen to podcasts, and frequent visitor here at the site since started trading. I help when I can and share what I am comfortable sharing. I am an IT/developer by profession and like to try out many ways to make things easier and effective. I keep trying and trying, losses here and there until I find something that works for me. I use indicators I found here and other sites. I study, parse, mod, and test them with my strategy. I stick to one to three working strategies.

My trading rules:
1. Trade with "what you See" and not what you Think...
2. Manage your risk with a stop loss or an entry/exit plan...
3. Do 1 and 2, profits will take care of themselves.

In addition:
4. Never chase.
5. Never panic sell.
6. When in doubt, hold until the position retraces.
7. Wait for reversals before buying or selling.

Yes, there is no magic indicator or crystal ball, but you can certainly learn and build a winning strategy, this includes indicators/labels/alerts that will work and make trading fun and profitable to you. You will still have losses (minimal) for some reason, but your winning ratio will be much better even the small profits adds up. I have added screenshots of my daily chart and watchlist. I now mainly trade momentum, near 52Wk highs, and overnight stocks with after-hour volume and high momentum for the day. Stick your trading rules. "Trade with What you See and not what you think...". Take daily walks and workouts to disconnect from trading. It helps.
 
Last edited by a moderator:

brendel

New member
@brendel thanks for sharing this. Just curious, which timeframe do you trade the squeeze on? Which lower timeframe would you suggest is the best to use the TTM Squeeze for a day trade?

I mostly scalp off the 2 minute chart using the squeeze, it also depends on the ticker. For example TSLA moves so fast usually. For other tickers like AAPL, and SPY I will do 5 minute, and for NVDA I will do usually 15 minute. The squeeze will work in any timeframe, but keep in mind the longer the timeframe the longer the squeeze. I would say majority of the time I stick with 2 minutes. TSLA moves way too fast in option price and usually will go up and down 20 points in a matter of minutes and can get several hundred dollars in just a few minutes which is why I like sticking with 2 minutes, for slower moving tickers I will go higher. It really depends what you get use to. I highly recommend paper trading at first for a few days until you have your strategy down. Trust me they are all not winners, but I either place a stop loss, or a mental stop loss of 20%, but prefer not doing mental. If I can get in the squeeze it will jump in one direction it is picking that right direction, but if it goes against what I think it will be based on the histogram/macd and EMA, I lose but won't lose more then 20%. For 2 minute squeeze I am usually only in for 3-5 bars once it fires and get out, and will do that maybe 3-4x a day.

Also another tip if you are scalping options, I try to pick options that are 1-2 strikes OTM, and has high volume and interest, so the bid/ask is close, especially if it hits my stop loss I do a market to get out. If i do a limit with the stop loss it will sometimes go right past it. You don't have to do a stop loss, but I prefer that otherwise mental stop loss will give you way more losses thinking it will come back and you wait and wait and then you are down several hundred dollars depending upon how many contracts you buy
 

kking

New member
I mostly scalp off the 2 minute chart using the squeeze, it also depends on the ticker. For example TSLA moves so fast usually. For other tickers like AAPL, and SPY I will do 5 minute, and for NVDA I will do usually 15 minute. The squeeze will work in any timeframe, but keep in mind the longer the timeframe the longer the squeeze. I would say majority of the time I stick with 2 minutes. TSLA moves way too fast in option price and usually will go up and down 20 points in a matter of minutes and can get several hundred dollars in just a few minutes which is why I like sticking with 2 minutes, for slower moving tickers I will go higher. It really depends what you get use to. I highly recommend paper trading at first for a few days until you have your strategy down. Trust me they are all not winners, but I either place a stop loss, or a mental stop loss of 20%, but prefer not doing mental. If I can get in the squeeze it will jump in one direction it is picking that right direction, but if it goes against what I think it will be based on the histogram/macd and EMA, I lose but won't lose more then 20%. For 2 minute squeeze I am usually only in for 3-5 bars once it fires and get out, and will do that maybe 3-4x a day.

Also another tip if you are scalping options, I try to pick options that are 1-2 strikes OTM, and has high volume and interest, so the bid/ask is close, especially if it hits my stop loss I do a market to get out. If i do a limit with the stop loss it will sometimes go right past it. You don't have to do a stop loss, but I prefer that otherwise mental stop loss will give you way more losses thinking it will come back and you wait and wait and then you are down several hundred dollars depending upon how many contracts you buy
Good stuff! Thanks for the advice! I've been trading off the 2 min chart with SPY and the squeeze has been working for that ticker. Also noticed many times I could have held longer when using the 5 min chart, so your advice is spot on to what I've discovered. Will try trading SPY on the 5 min makes so much sense. Thanks again for the advice, so very helpful!
 

brendel

New member
Good stuff! Thanks for the advice! I've been trading off the 2 min chart with SPY and the squeeze has been working for that ticker. Also noticed many times I could have held longer when using the 5 min chart, so your advice is spot on to what I've discovered. Will try trading SPY on the 5 min makes so much sense. Thanks again for the advice, so very helpful!
I have learnt a while ago from hard lessons always better to leave money on the table then to lose all the money on the table.

What I mean is get out even if 20% return if your indicators and strategy is based on your exit plan, yes you might see it go up later and you are like oh man I should have stayed in, but you can always get back in again. I rather have many small wins , and very small losses then go for home runs. In the long run you want your win rate to be high and expect to have losses but minimize those losses, and profit is profit
 

kking

New member
I have learnt a while ago from hard lessons always better to leave money on the table then to lose all the money on the table.

What I mean is get out even if 20% return if your indicators and strategy is based on your exit plan, yes you might see it go up later and you are like oh man I should have stayed in, but you can always get back in again. I rather have many small wins , and very small losses then go for home runs. In the long run you want your win rate to be high and expect to have losses but minimize those losses, and profit is profit
Yes, no lies told here. Expert advice once again. TY @brendel!
 

sunnybabu

Member
Experts, Are there any optimal day trading indicators that you have seen success with? could you please share some of your insights and thought process for the optimal day trading indicators/timeframes/scans

As Always many Thanks
S
 
G

greenalert20

Guest
Welkin Volume, Fib retracements, TMO MomentumOscillator, and Buy The Dip (Percentile). I do 2 min charts but a lot of people have been recommending 5 mins.
 

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