SPX Trading Strategy for ThinkorSwim

[rad14733]

@rfb This setup is for scalping so whatever strike price and Delta you are comfortable with works... I usually try for 1st OTM, but no less than .30 Delta, and more contracts for bigger profit margin... On a run-up you'll end up ITM before exiting...

 

[rfb]

@rfb This setup is for scalping so whatever strike price and Delta you are comfortable with works... I usually try for 1st OTM, but no less than .30 Delta, and more contracts for bigger profit margin... On a run-up you'll end up ITM before exiting...

@rad14733 Thanks for the info. Much appreciated!

 

[king_louie]

@Hypoluxa

Hi all. New member here and just started looking at the wealth of information on this site. Thank you Hypoluxa for your efforts. Been reviewing this thread and all those that have contributed. I'm in the early watching and learning stages. The indicators for this strategy seem pretty consistent. A nice trader's edge if you will. Quick question and my apologies if I missed it, but how far out are you placing the option trades? Current week or following? I get the .35 delta, but was wondering the length of time out. Thanks again!

Current week unless it's on a Friday then you can do the following week due to theta. It's a scalp/day trade so you don't want to go too far out on the date

 

[Hypoluxa]

@Hypoluxa

Hi all. New member here and just started looking at the wealth of information on this site. Thank you Hypoluxa for your efforts. Been reviewing this thread and all those that have contributed. I'm in the early watching and learning stages. The indicators for this strategy seem pretty consistent. A nice trader's edge if you will. Quick question and my apologies if I missed it, but how far out are you placing the option trades? Current week or following? I get the .35 delta, but was wondering the length of time out. Thanks again!

since SPX has 3 expirations per week...I rarely select a current day expiration....the market makers screw with it so bad.
Example:
Expirations are every Mon, Wed and Friday
On Mondays and Tuesdays, I use Wednesday. On Wednesday and Thursdays I choose Friday and on Fridays I use the next Monday.
I hope this makes sense.

 

[rad14733]

To add to what @king_louie stated, if you are new to scalping options be aware that the closer you get to expiration with weekly options, the greater the volatility and spread... For some symbols I won't trade Friday expiration weeklies past Wednesday, and Thursday at the very latest... By Friday there has usually been too much decay to get enough movement to be worthwhile, and even by Thursday for others... SPX options are a whole different beast due to multiple expirations, as @Hypoluxa pointed out...

 

[rfb]

since SPX has 3 expirations per week...I rarely select a current day expiration....the market makers screw with it so bad.
Example:
Expirations are every Mon, Wed and Friday
On Mondays and Tuesdays, I use Wednesday. On Wednesday and Thursdays I choose Friday and on Fridays I use the next Monday.
I hope this makes sense.

@king_louie @rad14733 Outstanding guidance, and yes Hypoluxa, all makes perfect sense. This certainly helps me for option trade planning! Thanks again to all!

 

[Hypoluxa]

To add to what @king_louie stated, if you are new to scalping options be aware that the closer you get to expiration with weekly options, the greater the volatility and spread... For some symbols I won't trade Friday expiration weeklies past Wednesday, and Thursday at the very latest... By Friday there has usually been too much decay to get enough movement to be worthwhile, and even by Thursday for others... SPX options are a whole different beast due to multiple expirations, as @Hypoluxa pointed out...

Spot on! This goes with any stock when buying options!

 

[tom23824]

==I got no trade here==

==green==

 

[rfb]

==I got no trade here==

==green==

@tom23824 Thanks for posting the screenshots. If you don't mind me asking, were you able to officially take the 3890 call trade? If so, what were your entry and exit points? Thanks again!

 

[tom23824]

@tom23824 Thanks for posting the screenshots. If you don't mind me asking, were you able to officially take the 3890 call trade? If so, what were your entry and exit points? Thanks again!

@rfb
I officially took the trade on 3890 call.
Bought the call at the open of the candle of the option chart and close the trade for $1 profit.
.
I wish I can have a big blurb on the chart showing the close price of the previous candle (bar[0]-1). A silly wish????
This will make easy to place the buy to open trade.
I always go with LIMIT order (open and close).
@Hypoluxa @rad14733 Is it possible to have something like a big box on the chart with "bar[0]-1"'s close price displayed on it?
ofcourse, every new bar is printed, the blurb or box is re-painted on the new "bar[0]-1" candle!!!

 

[Pensar]

@tom23824 Is this something like what you were thinking of? It should display the previous close value as a bubble on the chart.
AddChartBubble(!IsNaN(close[-2]) and IsNaN(close[-3]), low, round(close[-1]), color.white, no);

 

[rad14733]

@tom23824 Or for a Chart Label, you could use the following...

AddLabel(yes, Round(close[1], 2), Color.WHITE);

 

[bhaskar_madugula]

Does this strategy works for NDX?

 

[Hypoluxa]

Does this strategy works for NDX?

This setup isn't a "copy and paste" for any other stock....you can use the indicators to try and tweak it to a stock...but never trust it as it is.

 

[bhaskar_madugula]

Are you still following Mon, Tues expiry Wed
Wed Thursday Friday expiry?

 

[Daybuck]

Awesome strategy! Seems to require alot of screen time. I know there was brief discussion earlier about setting alerts. Has anyone been able to figure out how to set alerts in TOS once criteria is met? Thanks

 

[bhaskar_madugula]

Timeframe 5 mins works or it needs to be 10 mins, please advice?

 

[Hypoluxa]

Timeframe 5 mins works or it needs to be 10 mins, please advice?

FROM POST #1:
Setup:

• 10 Min chart
• Heikin Ashi candles
• SMA 3/9
• MACD Bollinger Bands (the one Ben has posted on here a while back) 8,16,36 and uncheck "show plot" on the BB upper, BB lower and BB mid line. You will only be using the zero line, MACD dots and MACD Line for entry purposes. The inputs of "b length" and "bb num dev" are irrelevant here since you will remove the the plots that I mentioned.
• ErgodicOsc 2,10,36 (changed the default negative to red)

 

[rad14733]

Awesome strategy! Seems to require alot of screen time. I know there was brief discussion earlier about setting alerts. Has anyone been able to figure out how to set alerts in TOS once criteria is met? Thanks

For me all trading is screen time... I don't walk away in the middle of a trade... Some do but I don't, even with Stop Loss and Limit in place...

Check the Learning Center for setting alerts... That is beyond the scope of this topic...

 

[barbaros]

@Hypoluxa I took a shot at putting your strategy into a study. All parameters are customizable. It will plot buy and sell signals and alert when signals show up. I was thinking that the BB dots being above and below the zero line can be turned into a percent up or down. Let me know if you can think of any enhancements.

# SPX Strategy
# Strategy designed by Hypoluxa
# barbaros - 2021/02/25

declare upper;

input price = close;
input SMAFastLength = 3;
input SMASlowLength = 9;
input BBlength = 30;
input BBNum_Dev = 0.8;
input BBCrossInBars = 3;
input BBCrossDistance = 1;
input MACDfastLength = 8;
input MACDslowLength = 16;
input MACDLength = 36;
input ERGODICLongLength = 2;
input ERGODICShortLength = 10;
input ERGODICSignalLength = 36;
input ERGODICAverageType = {"SIMPLE", default "EXPONENTIAL", "WEIGHTED", "WILDERS", "HULL"};

# Check for 10min chart
Assert(GetAggregationPeriod() == AggregationPeriod.TEN_MIN, "Incorrect Chart Time, use 10m");

# MACD
def MACD_Data = MACD(fastLength = MACDfastLength, slowLength = MACDslowLength, MACDLength = MACDLength);
def MACD_Direction = if MACD_Data > MACD_Data[1] then 1 else -1;

# Ergodic
def Ergodic_Data = ErgodicOsc("long length" = ERGODICLongLength, "short length" = ERGODICShortLength, "signal length" = ERGODICSignalLength, "average type" = ERGODICAverageType).ErgodicOsc;

# SMAs
def SMA_Fast = SimpleMovingAvg(price, SMAFastLength);
def SMA_Slow = SimpleMovingAvg(price, SMASlowLength);

# Signals
def buySignal = SMA_Fast > SMA_Slow and Ergodic_Data > 0 and MACD_Direction == 1 and MACD_Data >= BBCrossDistance and MACD_Data crosses above 0 within BBCrossInBars bars;
def sellSignal = SMA_Fast < SMA_Slow and Ergodic_Data < 0 and MACD_Direction == -1 and MACD_Data <= -BBCrossDistance and MACD_Data crosses below 0 within BBCrossInBars bars;

# Plots
plot buy = buySignal and !buySignal[1];
buy.setPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_UP);
buy.setDefaultColor(Color.GREEN);
buy.setLineWeight(3);

plot sell = sellSignal and !sellSignal[1];
sell.setPaintingStrategy(PaintingStrategy.BOOLEAN_ARROW_DOWN);
sell.setDefaultColor(Color.RED);
sell.setLineWeight(3);

# Alerts
Alert(buy, "Buy", Alert.BAR, Sound.Ring);
Alert(sell, "Sell", Alert.BAR, Sound.Ring);