Repaints The PAM High Low Chart Setup For ThinkOrSwim

[OGOptionSlayer]

@OGOptionSlayer was wondering if i can pick your brains on something like this , so you can see in the first 15 minutes that was a very strong sell but the stock recovered (this is set using the 40 candle at 15 minutes)

How do you handle sudden changes in direction like this, this has been a real problem for me. If you saw this chart, would you just consider this as a no trade since the targets have been hit for the day and the price is just going to chop around ? Also when the price has entered the green zone or the red zone (depending on the sell down or buy up), do you just wait for it to break out of the zone ?


Like life would be lovely if we get something as nice as this all the time but it doesnt happen

Hi @alexsmith3546, to be honest, these charts are both charts I would play and this is how:

Chart #1 Choppy Chart: I would have taken my full position out at the bottom of the last candle or as near to it as soon as I saw price action reverse. This is just a choppy day. I would have also gotten in the calls going back up. This is a 15m chart and you have plenty of time to react. As you can see you go through several Fib levels all the way up to what I think is 28.6%. I would have looked to take profit there for at least half of my position setting my new stop loss at the low of the highest candle up, which would be SATY's fib level. You would have been stopped out but still with significant profit.

Many times you will see your runners come in for even more gain and you should set your next TP at the fib level of the next SATY ATR level for either the remaining runners or just leave two. At this point, you would be riding profit and there was nothing signifying a real trend change. Don't fight the trend.

Chart #2: I would take some profit at SATY ATR call line (blue line), half position. Three more at two fib levels higher since that call line is so close to the next one. And then leave runners but set stops to the previous fib levels or the low of the highest candle, whichever you prefer. You typically aren't going to get a better run for this unless it's one of those crazy trend days so I would consider closing completely out at that level. This is at least a 200-300% play which is consistent for this indicator if used properly.

Final Thoughts on the Indicator vs Personal Risk Management Strategy:
The thing with the indicator is that you know your risk management better than I do and you should be able to easily adapt it to this signal and especially combined with SATY's ATRs or the built-in fib levels. Now that @Chemmy has added the 10 SMA and 50 SMA, you can see that cross occurring and that will really tell you if the trend is reversing.

As we all grow this indicator as a community, I believe it will be one of the best on the market. It consistently produces results if you don't try to diamond hand and realize that 20% profits compounding daily are better than waiting for those 200%-1000% gainers that come occasionally. It comes down to risk tolerance and discipline which I highlight in one of my first posts as being the most important traits when trading with this indicator or any indicator in this crazy consolidation market.

Finally, it's important to use my TTM Squeeze strategy in combination with this to sniff out the trend change or to know when to jump in because the reversal is coming in. I have now combined BBs and MACD as well so I can see if the trend is strong as it pushes up against the BBs or if it's starting to falter and move away from the edges of the BBs. I look for the MACD cross (12 ema and 26 ema is standard) and this is a further area of confluence for a trend change.

Sorry for the long reply but I hope it helps.

 

[OGOptionSlayer]

MTF would be great. Q. Would it have 65m? I know it's just 5 minutes added to the 1h chart.

The 1h chart is perfectly fine and since I'm now using the SATY's ATR levels updated, I've left the 65m chart and just focused on the 1hr. You can tell that it has served me well looking at this 1hr play today on SPY.

I have my hourly chart set to 10 bars as I'm trying to catch the current price action more than the historical price action. Historical price action doesn't mean anything to me. It's a lagging indicator except for when I'm looking for symmetry in an area of confluence but I don't use this indicator for symmetry obviously.

 

[OGOptionSlayer]

This works well with Bollinger bands, thanks for sharing.

Honestly @SpockLogic, I wouldn't use it without Bollinger Bands and Squeeze Pro. The Bollinger Bands let you know how strong the current trend is and if it's getting ready to reverse. Squeeze Pro or TTM Squeeze keeps you from getting shaken out by the MM's.

 

[graci117]

Honestly @SpockLogic, I wouldn't use it without Bollinger Bands and Squeeze Pro. The Bollinger Bands let you know how strong the current trend is and if it's getting ready to reverse. Squeeze Pro or TTM Squeeze keeps you from getting shaken out by the MM's.

Can you please elaborate how Squeeze Pro help keep getting shaken out by MM's. I am using it on my chart and have seen video of it, however I don't think I am using it correctly. Thanks!!

 

[Gssound]

created a watchlist column if someone interested

http://tos.mx/GldOOGv

Any way to limit the count number, up to 9? Anything more than 10 you cant sort well on the watchlist

 

[OGOptionSlayer]

created a watchlist column if someone interested

http://tos.mx/GldOOGv

@tradelex20 Can you explain this to me Sesame Street style? I hook this up as a column on my watchlist and I can't figure out what timeframe this is for. Is it set on the 1 hr?

 

[Gssound]

@tradelex20 Can you explain this to me Sesame Street style? I hook this up as a column on my watchlist and I can't figure out what timeframe this is for. Is it set on the 1 hr?

if you added it to your watchlist, right click on the name of the column at the top and click edit formula then at the top of the popup you can change the column name and timeframe.

 

[axlotto]

Sorry everyone. I was out for personal stuff. I'm back but give me time to review the messages and I will answer each and every one of you. I wasn't getting notifications during this timeframe to tell me there were posts coming in on this or would have been back sooner. Just had a lot on my plate this past week that needed to get done.
A video explaining this indicator is coming very very soon and I think it will clear up any questions that most of you have.
I have never created a video so it will be my first one. I hope that it does you justice. Expect it by the end of next week because I'm OCD and I will probably shoot and reshoot it until it meets my standards, which are horribly high.

No worries, man. Life happens! I was going to ask if you would record a video, but you beat me to it!

On that note, I've used Loom for recording, editing, annotating, and sharing walk-throughs of my trades. I do it for my own personal journaling but share with a few friends in my trading group.

Loom is super user-friendly and interactive and lets people comment on literally any specific second of the video. For sure easier to use than OBS recording studio!

 

[tradelex20]

@tradelex20 Can you explain this to me Sesame Street style? I hook this up as a column on my watchlist and I can't figure out what timeframe this is for. Is it set on the 1 hr?

Yes, it is set for 1h. Of course, you can set it up as per your liking.

 

[OGOptionSlayer]

No worries, man. Life happens! I was going to ask if you would record a video, but you beat me to it!

On that note, I've used Loom for recording, editing, annotating, and sharing walk-throughs of my trades. I do it for my own personal journaling but share with a few friends in my trading group.

Loom is super user-friendly and interactive and lets people comment on literally any specific second of the video. For sure easier to use than OBS recording studio!

These comments will be deleted because we are talking about videos and the conversation needs to stick to the actual indicator but thanks for letting me know about Loom. I was looking for the right platform. I'm currently switching brokers, moving from TOS to Fidelity/IKBR just due to being able to trade SPX options after-hours so once the money hits those accounts, I will get it going.

 

[OGOptionSlayer]

Can you please elaborate how Squeeze Pro help keep getting shaken out by MM's. I am using it on my chart and have seen video of it, however I don't think I am using it correctly. Thanks!!

When using Squeeze Pro, you want to see when the bars turn from cyan to dark blue if you are in a bullish trend. When you are in a bearish trend, you want to wait until the candles turn from red to yellow. 2 bars need to close with these color changes and they have to be sequential.

I will say this though, typically the indicator points out when a reversal is going to happen before Squeeze Pro does and your stop loss should be the entry line for the opposite play of what you are currently in. I don't wait for it to close either. It's my stop loss and I almost always have my stop automatically executed so I don't try to diamond-hand it.

If you were using the indicator today on NVDA, you would have caught (at minimum) a 5-pt move and at maximum, an 8-pt move and the indicator still hasn't triggered a stop loss. Finally got a reversal stop loss signal at 11:48. Max gain using the indicator was 9.88 pts, starting at 154.92 to 164.80.

You don't have to take unnecessary risks with this indicator and given it's only price action-oriented, it's not a lagging indicator like other indicators.

 

[OGOptionSlayer]

@Chemmy You named the indicator Chemmy High-Low. I liked the previous name, it made my ego happy, but you did the development on it. We need to think of an actual great name for it. Does anyone have any suggestions?

Let's brainstorm and come up with a final name for it.
My thoughts are:
1) something that describes what it does. High-Low doesn't seem right. It's more Price Action Momentum (Maybe the PAM indicator lol)
2) it should be something cool but describes its purpose. It is a reversal indicator in every sense of the word.
3) I don't have any name suggestions, would look for the community for that but I like TradingWarz how they say the "Holy Grail" and stuff like that.
Just thoughts. We can leave it as is as well.

 

[tradelex20]

It would be awesome if all past entrees were kept intact. It will help for backtesting.

 

[graci117]

When using Squeeze Pro, you want to see when the bars turn from cyan to dark blue if you are in a bullish trend. When you are in a bearish trend, you want to wait until the candles turn from red to yellow. 2 bars need to close with these color changes and they have to be sequential.

I will say this though, typically the indicator points out when a reversal is going to happen before Squeeze Pro does and your stop loss should be the entry line for the opposite play of what you are currently in. I don't wait for it to close either. It's my stop loss and I almost always have my stop automatically executed so I don't try to diamond-hand it.

If you were using the indicator today on NVDA, you would have caught (at minimum) a 5-pt move and at maximum, an 8-pt move and the indicator still hasn't triggered a stop loss. Finally got a reversal stop loss signal at 11:48. Max gain using the indicator was 9.88 pts, starting at 154.92 to 164.80.

You don't have to take unnecessary risks with this indicator and given it's only price action-oriented, it's not a lagging indicator like other indicators.

Thanks so much for the explanation!! Most of the times I see the bars where the signal fires is so large that I find it hard to take a trade with a big stop loss.

 

[Chemmy]

@Chemmy You named the indicator Chemmy High-Low. I liked the previous name, it made my ego happy, but you did the development on it. We need to think of an actual great name for it. Does anyone have any suggestions?

Let's brainstorm and come up with a final name for it.
My thoughts are:
1) something that describes what it does. High-Low doesn't seem right. It's more Price Action Momentum (Maybe the PAM indicator lol)
2) it should be something cool but describes its purpose. It is a reversal indicator in every sense of the word.
3) I don't have any name suggestions, would look for the community for that but I like TradingWarz how they say the "Holy Grail" and stuff like that.
Just thoughts. We can leave it as is as well.

yo, my bad on that -- I prefix all custom indicators "Chemmy_" for ease of finding them against the default indicators when I sort/search inside of TOS. I don't mean to take any credit for this indicator, call it what you like!

PAM, etc. is fine with me -- I'm still working on doing a few things with it personally and am traveling starting tomorrow, so I look forward to seeing what you all come up with, and we can replace the study link with the new name whenever it's decided

 

[OGOptionSlayer]

Thanks so much for the explanation!! Most of the times I see the bars where the signal fires is so large that I find it hard to take a trade with a big stop loss.

So on the large bars, you want to modify your strategy slightly. The large bar is an outside bar (OB) and it's a good thing but you have to understand what it means. It means that the bulls/bears have not made up their mind yet. I look to see where the large bar closes. The next bar is going to be an inside bar (IB) obviously.

For this setup, I look to the next bar after the IB and wait for it to either make a HH or LL. That's the direction that's been decided. If you are in puts and it starts heading toward your stop loss, then you obviously don't want to take that play. But if you are in puts and price action starts going lower, wait until it closes below the IB and take your entry. The new HH or LL (whether it's calls or puts respectively) is the support/resistance of the short-term trend.
Your stop loss will be the opposite (either the high or the low of that bar of the opposite play you took). Eventually, we will make this indicator do this setup but these plays are extremely strong because the market has decided its direction.

So TLDR, strategy for this type of situation is:
1. OB (engulfs previous candle or candles), don't take play, have patience.
2. Next bar is an IB. Still practice patience and wait for the close. The next candle could still be an IB of the previous IB if you are squeezing. Still very good because the market is building up energy that it is going to release.
3. When the next candle closes above or below one of the IB's after an OB, you take that direction and put your stop loss at the opposite end of the candle.

I hope this helps. I will elaborate soon with better examples but this is one of my favorite setups. Also, combined with fib levels, if the tend is reversing, look to take profits at your Fib levels of 38.6% and higher. I scale out and leave runners almost every time on this trend because the runners can just keep running.

 

[OGOptionSlayer]

It would be awesome if all past entrees were kept intact. It will help for backtesting.

The entries are objective though depending on your trading style. I do not take every signal which is what a backtest would do. I would love to properly backtest this on the 15m as I think that is the most clean timeframe to trade these in. The hourly to get the signal but trading in the 15m or sometimes I just trade in 15m all day because it is literally very clean most of the time as long as the market is not just chopping everywhere.
Maybe @Chemmy can help with the backtesting of this. I would be interested to see the results.

 

[Trader Raider]

I would love to properly backtest this on the 15m as I think that is the most clean timeframe to trade these in. .

FWIW, I back tested various timeframes and instruments (all were futures) across 10 years of data. If you back test, I will be curious if you find, as I did, that the indicator needs to be optimized to each instrument and timeframe to be profitable. My testing was done without filters such as the squeeze in order to evaluate entry based strictly on price action.

For me, the very best aspect of this indicator is the dynamically-adjusting levels of S/R that can be calculated from a higher timeframe and plotted on the lower. Like you, I prefer the 15 min timeframe but my tests showed that 5 min or 15 min didn't matter much except in determining the size of the range to consider. What surprised me was how much better confluence with the 30 min timeframe performed vs confluence with the hourly timeframe. I didn't expect that.

Anyhow, that's what I found testing this thing on futures. What you're looking for trading options may be different. I remain grateful that you shared your strategy because the constantly-updating S/R from the 30 min timeframe is immensely helpful in my trading. THANK YOU!

Best wishes and happy trading.

 

[OGOptionSlayer]

FWIW, I back tested various timeframes and instruments (all were futures) across 10 years of data. If you back test, I will be curious if you find, as I did, that the indicator needs to be optimized to each instrument and timeframe to be profitable. My testing was done without filters such as the squeeze in order to evaluate entry based strictly on price action.

For me, the very best aspect of this indicator is the dynamically-adjusting levels of S/R that can be calculated from a higher timeframe and plotted on the lower. Like you, I prefer the 15 min timeframe but my tests showed that 5 min or 15 min didn't matter much except in determining the size of the range to consider. What surprised me was how much better confluence with the 30 min timeframe performed vs confluence with the hourly timeframe. I didn't expect that.

Anyhow, that's what I found testing this thing on futures. What you're looking for trading options may be different. I remain grateful that you shared your strategy because the constantly-updating S/R from the 30 min timeframe is immensely helpful in my trading. THANK YOU!

Best wishes and happy trading.

It's taken me a long time to develop and put into words. I always found other indicators to be useful but didn't predict price action and changing S/R levels. The way this adapts to those is simple yet extremely effective. It's a combination of John Carter's HOLP and LOLP plays and Trading Warz Golden Indicator with my spin on it lol. I say it's like both of them had a baby and this indicator is the result.

It makes me super happy to get replies like this because my whole goal is to help retail get out of the red and into the green. I'm glad you find use in it and always keep us updated with any changes you like to see.

It's interesting how the 30m performs better. I don't really look at it but will start now. I've always liked the long time frame trends and the 15m. I also trade on the 3m with it and it works very well but you better be great at scalping and not looking to get those 100% trades. More like 10-15% scalps in a choppy market. I can do it all day long most chop days and I use the longer time frames to trade on trend days.

 

[rfb]

Heard about this thread and been slowly reviewing all pages. Just to confirm, what is the most recent or recommended script for usage? Thank you for all your work and community support!