SPX Trading Strategy for ThinkorSwim

[Trader2021]

Hello everyone and Happy New year! I've come across another strategy that I wanted to share with you guys for SPX only.

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)

Option call logic:
1. The SMA's have to cross first.
2. For a call opportunity, you will then wait to see if the MACD dots cross above the MACD zero line. Its critical here to wait until one dot has cleared the zero line...you MUST see a gap....never enter with the dot on the line. Dots must be consistent as well...if its going up...then they must all be white...if a red dot populates between the time a white dot hits the zero line and the time one crosses clear....don't enter. I have a screenshot below showing this example - 13:00 a red dot appears.
3. The ErgodicOsc HAS to be green when the MACD dot crosses above the zero line. You can hold the trade most of the time until this turns from green to red....but I always set a sell limit just in case it whips back in the opposite direction.

Option put logic:
Obviously its the complete opposite of what I've described above for a call. BUT - the SMA's still have to cross first.

I backtested this 90 days and it came back with 95 opportunities. 75 were positive and 20 were breakeven or didn't move more than $1-$2 on the next candle before it changed to the opposite color candle.

For the positives, SPX only needs to move a minimum of $3 for the option premium to move to quick and decent profit. I generally buy 10 contracts with a delta of at least .35 or higher. So there were 75 times the past 90 days that SPX moved $3 or more (up or down) to be claimed a positive for me.

FYI - Since SPX doesn't begin trading until the opening bell, make sure you have your chart set to at least 1 day/10 mins. The 1 day will allow you to get a clear view of the chart and indicators, otherwise it will fill your entire screen if you use current day.

There's 2 opportunities on the attached screenshot: a put at 11:20 and a call at 14:10.

I hope those of you that trade SPX have the same success and feel free to ask questions regarding this strategy.

Hello,
Can anyone please share TOS Link for this strategy ? I am not able to setup correctly for some reason in TOS. Thanks in Advance.

 

[Trader_Rich]

I had another great day scalping using this strategy. After not getting a signal early on /ES, I focused on /YM and /CL, all of which were profitable. I was done by 10am and I believe I was 5-0. I did take 2 trades on /NQ late in the afternoon which were profitable, as I want to learn to trade /NQ as it seems to be the only thing that moves after hours.

 

[barbaros]

I had another great day scalping using this strategy. After not getting a signal early on /ES, I focused on /YM and /CL, all of which were profitable. I was done by 10am and I believe I was 5-0. I did take 2 trades on /NQ late in the afternoon which were profitable, as I want to learn to trade /NQ as it seems to be the only thing that moves after hours.

I see how /YM worked out, but I don't see how /CL was profitable, unless you deviated from the strategy. It didn't have any signals in the morning and chopped at the end of the day. Unless, I am mistaken...

 

[Trader_Rich]

I see how /YM worked out, but I don't see how /CL was profitable, unless you deviated from the strategy. It didn't have any signals in the morning and chopped at the end of the day. Unless, I am mistaken...

@barbaros I'm using Renko bars set at 3 ticks rather than 1m bars...maybe that's the difference? Nevertheless I'm posting my chart below....I took shorts on /CL at 8:42 CST and 9:35 CST. The 9:35 wasn't the best as it going into a Pivot and a STD Dev Level and I caught it right as I entered and bailed with a few ticks of profit. If you see something you disagree with please let me know. Using Renko, there were numerous entries today, but I had a ton to do and was pleased with my 5-0 morning thus I basically walked away

https://www.screencast.com/t/AfKv9gHvKd

 

[CaptainCrunch]

@barbaros I'm using Renko bars set at 3 ticks rather than 1m bars...maybe that's the difference? Nevertheless I'm posting my chart below....I took shorts on /CL at 8:42 CST and 9:35 CST. The 9:35 wasn't the best as it going into a Pivot and a STD Dev Level and I caught it right as I entered and bailed with a few ticks of profit. If you see something you disagree with please let me know. Using Renko, there were numerous entries today, but I had a ton to do and was pleased with my 5-0 morning thus I basically walked away

https://www.screencast.com/t/AfKv9gHvKd

@Trader_Rich
I've never tried renko bars. I set my chart at the settings that you mentioned, but it just moves too fast and whipsaws up and down. Can you please share your approach?

​

 

[irishgold]

in the SPX strategy for backtesting the following code: " else if orderDir[1] == 1 and ( (ExitAt != ExitAt.MACDOnly and high >= profitTarget) ) then 0"
Can someone explain ie @barbaros the ExitAt funtions and is there a resource for educating myself on this.
I noticed that the original code for order_dir did not include ExitAt. But backtesting it increases profitablity two-fold.
its a function, if possible I need to convert to Ninjatrader script.

 

[Trader_Rich]

@Trader_Rich
I've never tried renko bars. I set my chart at the settings that you mentioned, but it just moves too fast and whipsaws up and down. Can you please share your approach?

​

What instrument are you using Renko bars on? There are some, like /NQ that are hard for me to trade due to fast market speeds. I use it for /ES, /CL, and /YM. And I'm not using this setup for Options as many on here do...rather I'm scalping a few ticks out of the above mentioned

 

[barbaros]

in the SPX strategy for backtesting the following code: " else if orderDir[1] == 1 and ( (ExitAt != ExitAt.MACDOnly and high >= profitTarget) ) then 0"
Can someone explain ie @barbaros the ExitAt funtions and is there a resource for educating myself on this.
I noticed that the original code for order_dir did not include ExitAt. But backtesting it increases profitablity two-fold.
its a function, if possible I need to convert to Ninjatrader script.

It exits the trade if;

• MACD Only selection -> wait for MACD to change direction to exit
• Not MACD Only -> exit at profit target crossing

 

[CaptainCrunch]

What instrument are you using Renko bars on? There are some, like /NQ that are hard for me to trade due to fast market speeds. I use it for /ES, /CL, and /YM. And I'm not using this setup for Options as many on here do...rather I'm scalping a few ticks out of the above mentioned

I'm using it for /ES. It just seems to move quicker than I'm used to with regular candles. I guess I have to be quick on the trigger!

 

[rad14733]

@CaptainCrunch With Renko Bar based Tick Charts you adjust tick count whereas with candles you a number of minutes... The more ticks per bar, the slower the chart paints... The fewer the ticks per bar, the faster the chart paints...

 

[CaptainCrunch]

@CaptainCrunch With Renko Bar based Tick Charts you adjust tick count whereas with candles you a number of minutes... The more ticks per bar, the slower the chart paints... The fewer the ticks per bar, the faster the chart paints...

@rad14733 Thanks so much for the tip. You are very kind to share this and so is @Hypoluxa for posting this strategy. I've spent lots of money on so called "gurus" who don't know squat. If I come upon a strategy I will share as well.

 

[Trader_Rich]

Due to work I was away most of the week but got several YM and CL trades in today combining this strat with Renko and Ichimoku. Another $1k day in the books

 

[Trader_Rich]

Another positive start for the week. Yesterday I was a bit up and down, but put together a strong net positive. Today was a better day, as I was 4-0 scalping /YM and /CL.

I do have a question for @Hypoluxa @rad14733 @barbaros ....Do you wait for the "EMA's Stacked" to turn Red/Green before taking a Short/Long, even if MACD_BB, Diddi, and Wavetrend are already telling you that you have a valid short or long? This is something that I think I was missing previously and may have caused me to get in a trade at the wrong time.

 

[Madhu]

Another positive start for the week. Yesterday I was a bit up and down, but put together a strong net positive. Today was a better day, as I was 4-0 scalping /YM and /CL.

I do have a question for @Hypoluxa @rad14733 @barbaros ....Do you wait for the "EMA's Stacked" to turn Red/Green before taking a Short/Long, even if MACD_BB, Diddi, and Wavetrend are already telling you that you have a valid short or long? This is something that I think I was missing previously and may have caused me to get in a trade at the wrong time.

Hi Trader_Rich,
Are you trading options for /Ym and/CL

 

[rad14733]

Another positive start for the week. Yesterday I was a bit up and down, but put together a strong net positive. Today was a better day, as I was 4-0 scalping /YM and /CL.

I do have a question for @Hypoluxa @rad14733 @barbaros ....Do you wait for the "EMA's Stacked" to turn Red/Green before taking a Short/Long, even if MACD_BB, Diddi, and Wavetrend are already telling you that you have a valid short or long? This is something that I think I was missing previously and may have caused me to get in a trade at the wrong time.

If you are getting valid signals from the lower indicators the MA's should already be crossed... Do you have a specific example for use to review...???

 

[Trader_Rich]

Hi Trader_Rich,
Are you trading options for /Ym and/CL

@Madhu I'm using this strategy to scalp Futures rather than trading options on the aforementioned

 

[Trader_Rich]

If you are getting valid signals from the lower indicators the MA's should already be crossed... Do you have a specific example for use to review...???

@rad14733 I'll try to get a screen shot and send to you...right now AHT is moving slow so it may be a while. However, let me ask another question if you don't mind...

Do you concern yourself where the BB turns Red/Green. I set a "Dead Zone" for each underlying I trade as I initially felt there were stronger moves once the BB was red/green and had crossed my dead zone thresholds but I'm not so sure that holds true now.

 

[rad14733]

@rad14733 I'll try to get a screen shot and send to you...right now AHT is moving slow so it may be a while. However, let me ask another question if you don't mind...

Do you concern yourself where the BB turns Red/Green. I set a "Dead Zone" for each underlying I trade as I initially felt there were stronger moves once the BB was red/green and had crossed my dead zone thresholds but I'm not so sure that holds true now.

For that particular indicator I have not implemented a dead zone due to the various color changes... If they help with your trade decisions that's fine but it sounds like you are now having doubts... Comment them out for a bit and decide whether they truly help or not and report back...

 

[Rodrigov]

@Hypoluxa I have a question hope you can help... Yesterday (april 12th) at 13:50 (CT) red dot below cero line MA cross happend 13:40.. I entered a PUT 4115... it went up a little but then changed direction... where would you have exited the trade? (at what time)? when the dot changed to green (14:20)? or when the bar turned green ?(14:30)... in any case I took the loss.. could have close with a profit but wanted to let it ride... thank you...

 

[Trader_Rich]

For that particular indicator I have not implemented a dead zone due to the various color changes... If they help with your trade decisions that's fine but it sounds like you are now having doubts... Comment them out for a bit and decide whether they truly help or not and report back...

Yeah, my issue is (and I realize I'm using this a different way than originally intended) I think by implementing a "dead zone" I'm getting into a trade late and not realizing as much profit as I should or worse getting in at the very end of the run