Simple Yet Very POWERFUL Swing Trading Strategy

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Ken_Adams

New member
@ykd2018x
Im new here and i have been trying to piece together a trading system for options for awhile with all the bells and whistles, latest studies, multiple indicators, and now I see it's right under my nose! The RSI. Thanks for showing me.

Do you have any experience/backtesting looking at the RSI crossing at multiple different time frames? Or does that defeat its simplicity? This afternoon, after the market closed, I threw together a multi time frame scanner with Condition Wizard and the results all looked very nice.

The scan was:
1 Hr RSI(7) crosses 40,
Daily RSI(7) crosses 60,
increasing volume
price above 5,8, 13 EMA

Tried putting the scan code into a strategy and was having issues with "AggregatingPeriod." Maybe the conditions weren't being meet but anyone have thoughts on this strategy?

PS would be nice with auto support and resistance...
 
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Y

ykd2018x

Member
2019 Donor
hello @Ken_Adams
many traders here trading options for underlaying like stocks or indexs what i cannt understand is
why? becozz end of the day game remain same
u must be profitable by buying low selling high or reverse it in process
however at very first place why to increase
delta gamma theata vega headache
for a day trade buying options are understandable coz u cannt loose more then what u have put but same can be achived by a stop loss if u trade underlaying directly
also thats ur choice and my suggestion

your above mention scan conditon has mistake
daily rsi cross avobe 40? shuld be above 60
and price above 13 ema is okay

coz if daily rsi is 41 price may not above 13 ema

also depends on your timeframe and trade cycle

i can update entry method like as below as many of the group members found that its hard to entry

lets use 20 ema for lower time frame i.e. 5 mins
if price is above 20 ema at higher timeframe 5x3=15 min chart take the entey rsi crossing 60
exit either rsi hits 85 or the target profit or cross below 60

there is no right way of doing trading
and u will still have many many bad trades so get urself readt for them

good luck hope my reply make sense
 
K

Ken_Adams

New member
My mistake, switched them around. Daily RSI crossing 60, and 1hr RSI crossing 40

What I was mainly wondering about it multi time frame RSI and your thoughts on it?
 
D

DB01

New member
Wilders is slower and smoother than the exponential setting, yes?
 
BenTen

BenTen

Administrative
Staff
VIP
@DB01 I have no idea. You would have to test it out and see.
 
horserider

horserider

Well-known member
VIP
For moving averages, yes Wilders would be considered slower and smoother. If you double the length of exp and add 1 or subract 1, sorry forgot which it is, the exp will be the same as Wilders. Basically double the exp length and it is almost same as Wilders.
 
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jcga1981

Member
@mc01439 Hello, maybe the query I make is not possible ...
Is there a possibility that the strategy indicates entries at the time the day's session starts and what if or if it closes any operation when the session ends?
Another question I wanted to ask is if you can put take profit 15% or stop loss 15% as an exit condition, that is, that the exit of an operation can also occur due to any of these two parameters ...
And finally, can you put on the chart a counter of winning trades and losing trades that can be given per day? that is, throughout the day I analyze ROKU and that TAKE PROFIT appears on the chart: (and the number of winning trades that have occurred so far on that day) and the same with STOP LOSS.
Sorry for all orders
Thank you
 
BenTen

BenTen

Administrative
Staff
VIP
@kshires4 You can change the timeframe when you import the code. Default is set to "D" which means Daily.
 
D

designatedrhythm

New member
First post, starting to learn thinkscript to help my trading. I stumbled upon this strategy and it seems to work pretty well on certain securities with high liquidity.

This strategy seems to work best between 20-30min time frames if you are looking to day trade. I'm fairly new to Thinkscript so I am trying to figure out a few things to add to this script.

Can you make the trade system reverse order on the exit?
Can you add a stop loss function to back test the best profit/loss strategy with this system. I was thinking 3-4% gain would be profit taking. 1% stop loss
Can you make conditional orders in TOS to auto trade this strategy?

Any help would be appreciated.
 
K

KKaiser

Member
VIP
Dear Yogesh, I am very new to trading and since 6 weeks I am reading posts and trying to understand many indicators at same time. It's so overwhelming and you all are amazing people helping out each other.

What surprises me is every time I come across the best advice from few of respected traders like you and others "Simple is best" Use your eyes, AvgVolume, RSI and Sup/res. Thats all. After 4 weeks of reading post I started paper trading using only Avg volume, Sup/Res and RSI as suggested by @BenTen and others. It was great but as a curious soul I started to dig deeper and now I am lost in woods of indicators. I am so lost that everyday I have something new on my chart and somehow it is working but dragging me rather than keeping me focus.

Could you please please advice how can I go back focusing and what should be I using on my chart.

Thank you for your great help and support.
KKaisers
 
T

Trader Raider

Member
VIP
@KKaiser, I sympathize with your problem because it was the same for me in the beginning. For a long time, actually :oops: No one can tell you what you should use on your chart because we all see things differently and trade different setups.

If you want something simple, you can try 2 indicators available on this site: Mobius Trend Pivots and Ehlers MAMA FAMA. Watch what happens when the Ehlers lines cross. Watch what price does at trend pivots. If price reacts at the pivots or where the lines cross, can you look to the left and see that something similar happened earlier on the chart? If not, try marking a price line and then look at a higher time frame and see if something happened at or near that point. Another thing you can try is drawing a fib line from the day's low to high (or vice versa) and see if price reacts at various fib levels.

Those indicators may help you learn a little about price action but I wouldn't recommend blinding trading ANY indicator.

Best wishes.

Ehlers MAMA FAMA
https://usethinkscript.com/threads/ehlers-mama-buy-and-sell-signals-indicator-for-thinkorswim.34/
Mobius Trend Pivot Indicator
https://usethinkscript.com/threads/trend-pivot-indicator-by-mobius.1631/
 
B

bcnhill

New member
VIP
@Trader Raider I am reviewing these two in conjunction with each other and I wanted to say thanks for posting. You are right this seems to be a pretty straightforward view - but it is also true that one should not blindly follow indicators.
 
K

KKaiser

Member
VIP
@Trader Raider Thank you for your post. I truly appreciate your inputs. I will try to limit myself to few handful of stocks and 2-3 indicators to understand how price action works together with volume.
 
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dreamb0x

New member
VIP
RSICrossover("length" = 7, "crossing type" = "below", "threshold" = 40) is true within 2 bars

RSICrossover("length" = 7, "crossing type" = "above","threshold" = 60) is true within 2 bars

will it be right to say, in layman terms when RSI period of 7 hits above RSI 60 we initiate a buy order and if it hits below RSI 40 we initiate a sell order?
 
T

theincometeam

New member
hi! thanks for the strategy! i'm a bit confused. if the first post it said that the daily RSI has to be above 40. and on the hourly chart, above 60. but in another reply to post, i think you mentioned that daily RSI has to be above 60. which one is it?
 
B

Beltrame1

New member
yes but remember please please even for day traidng try selecting a bigger time frame atleast 5 min chart would be good if possible 15 min
on 1 min chart things are moving and will make you crazy in few minutes


another thing is no technique is a perfect technique and market can move anywhere from the place it is right now , keeping that in your mind always , define your average points or stop loss points , wait for entries for conifrmation ,

a confirmation means atleast that candle close above 60 or below 40 with a good or average volume , after that you place your trade , in an ongoing trend you will see RSI WENT ABOVE 60 before 2 mins and now become 55 , then become 56 then 48 , then 61 again , you have to wait it close there

also rsi is just a relative index , you have to master it , it can go up to 100 but i haven't seen it there in us markets, indian markets i have seen rsi going 100 and then going 98 and market price still going up

remember take profits , and if you are out , re-enter in new trend or new trade cycle

the MASTER thing remains price action of the market which is always depends on 2 things VOLUME+PRICE no indicator is perfect in trade history

to identify trend you EMA 5,8,13 for understanding where is your FRIEND use EMA but trades are not based on EMA crossover only , use it with this RSI techinque its very powerful and why i said 5,8.13 because they are best for swing trading so far



any other questions welcome
Could you post some pictures? Thank you
 
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