Scalping Strategy with Flow Data (Currently Testing)

CLICKANDGRAB808

CLICKANDGRAB808

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Where do you get your UOA (unusual options activity) from ? and how you determine direction from such data thanks a lot ????
 
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MasterSteve

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Watchlist for Thursday 1/16/2020
AAPL
NFLX
ROKU
TGT
TWLO
 
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MasterSteve

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Watchlist for Friday 1/17/2020

ADBE
BYND
DIS
UPS
V
 
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San

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@BenTen and I have been working on different ways to incorporate unusual options flow into our trading. The majority of work I’ve done with flow so far is related to swing trading, but it can also work for scalping as well. Here’s how this strategy works: Ben and I keep a watchlist of mostly large cap tech stocks that we usually watch and trade. I scan this watchlist every day after hours for notable option flows and make a watchlist of any that are likely to move the next day and in what direction.

This is different from my other UOA work because I am only scanning tickers we are familiar with, not scanning the whole market. Meaning I may not see unusual flow, but I can see if one side has more interest than the other. The goal for this strategy is for scalp trading only. I expect to see a move the very next day, or I’m out of the trade. The data we’ve gathered has been interesting so far and we thought we’d share what we’re working on with the site. We’ve gotten a fairly good success rate on picking stocks that move, but we’re still working on picking the right direction. I think the next stage of this will be to confirm our direction with flows in the first 15 minutes of the day, but that’s hard to track and watch in real time.

I’ll try and post an update at the end of the day with a recap. We’re still in the early stages of this and paper trading, but plan on eventually using this data to trade real money.
@BenTen and MasterSteve, Is is possible to share your knowledge, how you come up Watchlist every day, IIf you share your tips and technique or if you share video it will help us...
 
BenTen

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@San let me see if I can write something up this weekend.
 
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MasterSteve

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Watchlist for Wednesday 1/22/2020

AMD
GOOGL
MSFT
EA
NVDA
BABA

Edit: corrected date from 12 to 22
 
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MasterSteve

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@BenTen and MasterSteve, Is is possible to share your knowledge, how you come up Watchlist every day, IIf you share your tips and technique or if you share video it will help us...
I can answer that tomorrow, Ben can go over that answer as well.
 
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MasterSteve

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@BenTen and MasterSteve, Is is possible to share your knowledge, how you come up Watchlist every day, IIf you share your tips and technique or if you share video it will help us...
Hi San,

So we come up with the watchlist every day using the blastoff indicator https://usethinkscript.com/threads/blast-off-indicator-for-thinkorswim.621/ on our tech watchlist.
Here's the latest code for it.

https://tos.mx/ajuPLf7

You can set up a scanner with that and set the condition to be if the blastoff indicator is True. Then set it up running from a watchlist of your choosing and it'll print out a list of the expected movers for the next day. From that watchlist, I like to look at the flow for the day and see if there is any unusual flow or expected momentum that we could see for the next day. I'll take out anything that doesn't have much option flow or doesn't look interesting to watch for the next day. Then I'll post the results.
 
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MasterSteve

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Where do you get your UOA (unusual options activity) from ? and how you determine direction from such data thanks a lot ????
I get my unusual options activity from CBOE and I determine direction based on what the overall amount of orders look to be doing and if they're bought or sold on the bid or ask. This article does a good job of explaining the basics for the bid and ask price, the same is true for options.

https://www.investopedia.com/terms/b/bid-and-ask.asp
 
BenTen

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Thank you, @MasterSteve, for sharing that. I would have said the same thing. We used the Blast Off indicator to generate a new watchlist at end of day.
 
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tomsk

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Thank you, @MasterSteve, for sharing that. I would have said the same thing. We used the Blast Off indicator to generate a new watchlist at end of day.

Good choice for an indicator name, sort of reminds me of Raghee Horner's propulsion dots!
 
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San

Member
2019 Donor
Hi San,

So we come up with the watchlist every day using the blastoff indicator https://usethinkscript.com/threads/blast-off-indicator-for-thinkorswim.621/ on our tech watchlist.
Here's the latest code for it.

https://tos.mx/ajuPLf7

You can set up a scanner with that and set the condition to be if the blastoff indicator is True. Then set it up running from a watchlist of your choosing and it'll print out a list of the expected movers for the next day. From that watchlist, I like to look at the flow for the day and see if there is any unusual flow or expected momentum that we could see for the next day. I'll take out anything that doesn't have much option flow or doesn't look interesting to watch for the next day. Then I'll post the results.
@MasterSteve @BenTen
Thanks for your response and spending your valuable time on this query.

I am trying incorporate your feedback with my screen but i could not :) I knew I am not doing correctly. Please advice.

1. Created watch list using blast indicator and set the watch list parameter like below. But its not showing me blast result, I mean there is no indecision candle( Purple)
Plot : hh
input: trig
condition: is true
within 1 bar

BUT verified today watch list for below stock and its shows indecision candle (purple) for below stock.
BA
NVDA
PG
SQ
TGT
TSLA
V

2. I understand that you determine "low for the day and see if there is any unusual flow or expected momentum that we could see for the next day" based on Watch list indecision candle ( Purple) am i correct or you use any other method.

3. How do you determine "much option flow" - You replied " unusual options activity from CBOE " is there any specific site or any watch list or any scanner.

4. I request,please share any Video or document or tutorial which explain Unusual Volume activity and Flow.
 
YungTraderFromMontana

YungTraderFromMontana

Well-known member
Watchlist for Thursday 1/23/2020

BA
NVDA
PG
SQ
TGT
TSLA
V
How does this daily watchlist relate to scalping?
Do you determine a direction or just that there will be lots of movement?
 
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MasterSteve

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@MasterSteve @BenTen
Thanks for your response and spending your valuable time on this query.

I am trying incorporate your feedback with my screen but i could not :) I knew I am not doing correctly. Please advice.

1. Created watch list using blast indicator and set the watch list parameter like below. But its not showing me blast result, I mean there is no indecision candle( Purple)
Plot : hh
input: trig
condition: is true
within 1 bar

BUT verified today watch list for below stock and its shows indecision candle (purple) for below stock.
BA
NVDA
PG
SQ
TGT
TSLA
V

2. I understand that you determine "low for the day and see if there is any unusual flow or expected momentum that we could see for the next day" based on Watch list indecision candle ( Purple) am i correct or you use any other method.

3. How do you determine "much option flow" - You replied " unusual options activity from CBOE " is there any specific site or any watch list or any scanner.

4. I request,please share any Video or document or tutorial which explain Unusual Volume activity and Flow.
Hi San,

1. Here's a video Ben's put together to show how to set up the scan. Helped me get it working on my thinkorswim.
https://drive.google.com/file/d/198GW8-jKQD0vHdQdu5urqPqoZeidp2U0/view
2. We use the option flow for the day to see if there is a good amount of interest in the stock. We've found that if there's a large amount of flow the day before, and if the stock shows up on our scan, it is very likely to be scalpable the next day.
3. I use CBOE to watch options flow, but I think it would be possible to see if there's a large amount of flow using thinkorswim. Check out Option Hacker in the scan tab. You can see individual stocks flow there and that could give you an idea of the volume behind certain strikes.
4. An informative article about unusual options activity.
https://chatwithtraders.com/options-unusual-call-buying-activity/
Did I miss anything @BenTen ?
 
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MasterSteve

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How does this daily watchlist relate to scalping?
Do you determine a direction or just that there will be lots of movement?
We've found that if a stock appears on this watchlist, it is very likely to move the next day. There are thousands of opportunities to make money every day in the stock market. Our goal was to make a limited watchlist with the most likely movers so it would be easier to make money. People could take this, watch just a couple stocks, and enter according to their own risk tolerance.
We found that the best indication of direction typically comes the day of a scalp. We had previously tried to pick direction the day before and ended up over the long term at 50/50.
 
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MasterSteve

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Watchlist for Friday 1/24/2020

GOOG
AMZN
FDX
BYND
TSLA
 
BenTen

BenTen

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@MasterSteve Thank you, Steve, for posting the link to that video. You got it. One thing to note though is that in the video, you see I named the plot for the Blast Off indicator as "bullish." Keep in mind that the indicator does not tell you which direction the stock is going to move the next day. That was the only misleading thing in that video (my fault for naming it that way).
 
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San

Member
2019 Donor
@MasterSteve, @BenTen Thanks for your response, I have final query based on your video, In mean while i will try to learn CBOE and UOA concept.

1. Can you post updated Blast script which you are using. ( because in condition i could not see Bullish or Bearish )
2. In video After you select S&P 500 you select other scan in --> Personal --> Watch other from Personal -> Watch. ( Can you post your personal Watch setting )

I feel bad to ask some basic question... :) excuse me.
 

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