Scalping options with the DMI study

[Hypoluxa]

I’ve come across something with the DMI study that I think is definitely worth sharing.

My DI- is red and DI+ is green, so keep that in mind when I speak of the colors and I use a 1min chart and a 5min chart and both DMI’s are set to 100 days - it cuts out a ton of noise.

At the opening bell:
If both DMI’s are clearly separated and green, the stock has about an 85%-90% chance of ending at the closing bell at or above the opening price. It will fluctuate during the day, as always....but makes it way back up and over before the day ends.

If both of the DMI’s are clearly separated and red, the stock also has about an 85%-90% chance of ending the day at the closing bell at or below the opening price...usually always below.

I’ve also noticed...way more times than not...that when they both open red...buy a PUT immediately, as it continues to drop for several mins or maybe 30mins to an hour. Sometimes both green, it will continue up some...but I’ve noticed those can dip before taking off.

Another thing to note:
When both DMI’s open green...if at anytime during the day it drops below the opening price...it makes its way back up and over eventually. This helps when trying to buy a call cheaply.

I also use the TTM squeeze to make sure it’s the right time to enter or exit the trade.

I have 30 stocks on my watchlist and 13 of those had this opportunity today and only 2 didn’t follow this logic - BBBY and MSFT.

I’ve done a ton of backtesting over the past 2 weeks and testing live as well...and this logic has proven to be very accurate and successful.

Take a look at it and I hope you find luck in it just as I have.

 

[pradeepg95]

Hi @Hypoluxa thanks for sharing the strategy, I tried to analyze it as my understanding I`ve taken two charts of AAPL one is 1m, and the other is 5m both are 100 days. now both have DMI + and DMI-, which two we need to compare

At the opening bell:
If both DMI’s are clearly separated and green, the stock has about an 85%-90% chance of ending at the closing bell at or above the opening price. It will fluctuate during the day, as always....but makes it way back up and over before the day ends.

should we compare DMI+ in 1m and 5m?

 

[Hypoluxa]

Hi @Hypoluxa thanks for sharing the strategy, I tried to analyze it as my understanding I`ve taken two charts of AAPL one is 1m, and the other is 5m both are 100 days. now both have DMI + and DMI-, which two we need to compare


should we compare DMI+ in 1m and 5m?

you need to compare both. you're looking to see if DI+ is on top in BOTH the 1min and 5min chart. The same goes for DI-....you're looking to see if they are both DI- on top in the 1min and 5min...

 

[Hypoluxa]

look at NFLX, QCOM and SPY at the open this morning...they each were DI+ at the open...they all fell and came back up over the opening price. NFLX is dipping again...so it'll be interesting to see if it comes back up and over by the end of the day.

 

[pradeepg95]

look at NFLX, QCOM and SPY at the open this morning...they each were DI+ at the open...they all fell and came back up over the opening price. NFLX is dipping again...so it'll be interesting to see if it comes back up and over by the end of the day.

Yes .. thanks brother. Will do some back testing.

 

[pkcfc]

@Hypoluxa Just to clarify you mean 100 bars, not 100 days right?

 

[Ramesh16]

I’ve come across something with the DMI study that I think is definitely worth sharing.

My DI- is red and DI+ is green, so keep that in mind when I speak of the colors and I use a 1min chart and a 5min chart and both DMI’s are set to 100 days - it cuts out a ton of noise.

At the opening bell:
If both DMI’s are clearly separated and green, the stock has about an 85%-90% chance of ending at the closing bell at or above the opening price. It will fluctuate during the day, as always....but makes it way back up and over before the day ends.

If both of the DMI’s are clearly separated and red, the stock also has about an 85%-90% chance of ending the day at the closing bell at or below the opening price...usually always below.

I’ve also noticed...way more times than not...that when they both open red...buy a PUT immediately, as it continues to drop for several mins or maybe 30mins to an hour. Sometimes both green, it will continue up some...but I’ve noticed those can dip before taking off.

Another thing to note:
When both DMI’s open green...if at anytime during the day it drops below the opening price...it makes its way back up and over eventually. This helps when trying to buy a call cheaply.

I also use the TTM squeeze to make sure it’s the right time to enter or exit the trade.

I have 30 stocks on my watchlist and 13 of those had this opportunity today and only 2 didn’t follow this logic - BBBY and MSFT.

I’ve done a ton of backtesting over the past 2 weeks and testing live as well...and this logic has proven to be very accurate and successful.

Take a look at it and I hope you find luck in it just as I have.

could you please share your chart- Thanks

 

[BeakedFish]

Hello @Hypoluxa, this is a very interesting strategy you have. Reading it and backtesting it, it seems to work but there are a few instances where it does not.

For example, on 10/5/2020 (or yesterday), AAPL started the day with both the 1 min and 5 min DMI showing Red but at about 10:00 am EST the DMI crossed with green on top and the close being up. Is there any way to avoid this? I was thinking this could've happened due to market volatility but I'm not sure.

Also how do you use the TTM_Squeeze in your strategy? I'm curious to know how you use this trading strategy and if it has been profitable for you.

 

[Hypoluxa]

@Hypoluxa Just to clarify you mean 100 bars, not 100 days right?

its 100 days...it cuts out so much "noise" and knee jerk reactions to price fluctuations.

@BeakedFish I have found some instances this week when it didn't close where the DI's show it "should"....this week has been about 80% accurate though. Yes..I use the TTM squeeze for entry and exit purposes. The TTM is a critical component with this strategy.

 

[Ramesh16]

Pl share your chart here- Thanks

 

[Hypoluxa]

thank you for that! here's the link to the charts. Look how the DMI's are both green at open (1 and 5min) and the stock went below the open...but eventually made it back up and over. Many just stay up all day...but I wanted to share this example the most.

 

[easyman]

Hi in TOS , there is no "days for DMI" it's only "number of bars"... so how are you setting for 100 days.
Also when you say both DMI are Green , what do you mean ( bcoz DMI + is always Green ) .
Do you mean D+ is above D-?

Thanks

 

[Ramesh16]

thank you for that! here's the link to the charts. Look how the DMI's are both green at open (1 and 5min) and the stock went below the open...but eventually made it back up and over. Many just stay up all day...but I wanted to share this example the most.

thank you, make it clear now

 

[Hypoluxa]

Hi in TOS , there is no "days for DMI" it's only "number of bars"... so how are you setting for 100 days.
Also when you say both DMI are Green , what do you mean ( bcoz DMI + is always Green ) .

Thanks

the length is set to 100...I may have misspoke by calling it days. And I use the words "red" and "green" in the place of typing DI- and DI+ each time …just easier.

 

[vanphan]

If both DMI’s are clearly separated and green, .........................
If both DMI are clearly separated and RED...........

@Hypoluxa could you please clarify what you mean by GREEN and RED on the DMI ..... because i can only see Red and Green line are for DMI plus and DMI minus.....

 

[Gildes]

the length is set to 100...I may have misspoke by calling it days. And I use the words "red" and "green" in the place of typing DI- and DI+ each time …just easier.

@Hypoluxa Are you on the Discord channel ?

 

[s1111]

@Hypoluxa . I just installed this script and the way it looked this might be the best strategy I have come across which might help a lot. Trading with confidence without panic attack knowing it will be ok during trading and when the stock goes in the opposite direction. I mostly use 3 minute and 5 minute chart for scalp, is where any better setting than stock? Thank you so much for sharing, will try it out Friday. Will keep you posted.

 

[s1111]

The market is so choppy it changed directions in seconds. But I feel this strategy kinda gives you directions which I like.

 

[scott69]

FWIW I trade on the NQ using 1 minute for entry trigger. I use +DI and -DI on the 15 minute for overview of price energy. The DMs on a 1 minute chart are too noisy, and if you are using 100 period, you might as well use a longer initial time frame for your overview chart. Not sure how you would use DMs for entry on 1 or 5 minute charts unless it is for extreme reading reversals or crosses, then your time frame of 100 periods is too long. Just my 2 cents.

 

[s1111]

FWIW I trade on the NQ using 1 minute for entry trigger. I use +DI and -DI on the 15 minute for overview of price energy. The DMs on a 1 minute chart are too noisy, and if you are using 100 period, you might as well use a longer initial time frame for your overview chart. Not sure how you would use DMs for entry on 1 or 5 minute charts unless it is for extreme reading reversals or crosses, then your time frame of 100 periods is too long. Just my 2 cents.

Thank you for the information. I have used it on 1 and 5 minutes chart like the post suggests with setting at 100 . Yesterday etsy was both di+ on 1 and 5 minutes chart , got call but it tanked fast , it did come back some but theta killed my call premium.