True Momentum Oscillator for ThinkorSwim

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David45

New member
2019 Donor
Hi Markos,

Thank you for your reply and I'm sorry for the confusion. I am definitely not a day trader. Like you, when I take a position in an ETF it is usually for longer than a week at a time. I'm trying to capture the major moves up and down in the Nasdaq 100 using the triple ETFs TQQQ (long) and SQQQ (short/inverse). My current trading system is very simple. When the Fisher Transform (21 Period) is below zero I go short, when it's above zero I go long. So from early October 2018 to present I only had 5 trades total (short, long, short, long, short). The problem with the Fisher Transform (21) is that it gets me into the trend a bit late on both the short and long side and can sometimes gives false signals or whipsaws where it will pop above or below zero for just a few days.

I mention the daily time frame because I use the Fisher Transform (21) on the Nasdaq 100 daily chart. I check it daily when I come home from work in the evenings. So for example, when I come come from work, I open my daily chart of the Nasdaq 100 and check to see if the Fisher Transform is green (above zero) or red (below zero). If I am currently long and the Fisher Transform is green, I remain long via TQQQ. If I am currently short and the Fisher Transform is red, I remain short via SQQQ. But if it changes from the previous day from green to red for example, then the next day at the open I will sell my position in TQQQ and buy SQQQ which is the inverse.

So I am trying to find a better indicator/oscillator and strategy that will help me get into the trend earlier both long and short, and most importantly eliminate as many of the false signals and whipsaws as possible. It looks as though the TMO might be useful for this when the Aggregation is set to (WEEK) but used on the daily chart of the Nasdaq 100. Although I'm not sure if it's as simple as going/staying long when it's green or going/staying short when it's red? Are there any other nuances to using it for my intended strategy? Would the TMO with (DAY) Aggregation on the daily chart of the Nasdaq 100 also be useful for my intended strategy? It seems to be more prone to false signals and whipsaws if simply using it to go long when it's green and short when it's red.

Thanks very much in advance for any insights you can provide!
 
markos

markos

Well-known member
VIP
Hi Markos,

Thank you for your reply and I'm sorry for the confusion. I am definitely not a day trader. Like you, when I take a position in an ETF it is usually for longer than a week at a time. I'm trying to capture the major moves up and down in the Nasdaq 100 using the triple ETFs TQQQ (long) and SQQQ (short/inverse). My current trading system is very simple. When the Fisher Transform (21 Period) is below zero I go short, when it's above zero I go long. So from early October 2018 to present I only had 5 trades total (short, long, short, long, short). The problem with the Fisher Transform (21) is that it gets me into the trend a bit late on both the short and long side and can sometimes gives false signals or whipsaws where it will pop above or below zero for just a few days.

I mention the daily time frame because I use the Fisher Transform (21) on the Nasdaq 100 daily chart. I check it daily when I come home from work in the evenings. So for example, when I come come from work, I open my daily chart of the Nasdaq 100 and check to see if the Fisher Transform is green (above zero) or red (below zero). If I am currently long and the Fisher Transform is green, I remain long via TQQQ. If I am currently short and the Fisher Transform is red, I remain short via SQQQ. But if it changes from the previous day from green to red for example, then the next day at the open I will sell my position in TQQQ and buy SQQQ which is the inverse.

So I am trying to find a better indicator/oscillator and strategy that will help me get into the trend earlier both long and short, and most importantly eliminate as many of the false signals and whipsaws as possible. It looks as though the TMO might be useful for this when the Aggregation is set to (WEEK) but used on the daily chart of the Nasdaq 100. Although I'm not sure if it's as simple as going/staying long when it's green or going/staying short when it's red? Are there any other nuances to using it for my intended strategy? Would the TMO with (DAY) Aggregation on the daily chart of the Nasdaq 100 also be useful for my intended strategy? It seems to be more prone to false signals and whipsaws if simply using it to go long when it's green and short when it's red.

Thanks very much in advance for any insights you can provide!
Take a look closely at the chart that @BenTen attached yesterday. Markets are Fractal, thus, if one could ignore the after hours showing, it could pass for a daily or weekly chart.

Notice that PRICE is the ULTIMATE indicator! When the fake crossover happened on early Tuesday morning, the trend of the stock was down.

Then before the market opened on Tuesday, the TMO crossed over again. This time it worked.
The little Nuance to see here is that the second divergence was with the 2nd bottom of the TMO cross higher, TMO moving up while the stock was still in a downtrend.

Keep daily on daily and put weekly on weekly aggregations and just observe. They will just jump out at you after a while.
Have you read all of the TMO AND RSI Laguerre information in the Tutorials section? Please do that.
There is discussion of TMO inside some of the RSILg info. Gotta run.
 
markos

markos

Well-known member
VIP
@Nick If you are able to do so, please add in your "two cents worth"! (y)
 
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leakywaders

New member
Warehouse
Thank you for this indicator! I use MTF analysis for all of my trading decisions. I day trade and don't usually hold overnight. I follow primarily the hourly trend and buy dips whichever way that may trending both long and short. So I buy the dips - but many times they are countertrend to the daily and weekly if the hourly or 30 min is moving strongly against the daily during a correction. This allows me to pick up a lot of short trades during corrective dips - and then switch back back long at the hourly trend reversal and go long and join in with the daily and weekly uptrend.

I usually use a simple MTF 9EMA chart indicator I created for all time frames plotted together onto my 1 minute and 5 minute charts (stairsteps lines of the higher timeframe 9 Ema's. But this true momentum study being a lower study and adding multiple instances as suggested gives me the same effect - actually better - and cleans up my charts. I have Daily, Hour, and 15 min aggregations combined as 1 lower indicator. This will be very useful and looking back it basically does the same thing I do with my chart, time aggregated, 9 ema line plots and strategy, but actually better and with less clutter.

Thanks again! Love the indicator!
 
markos

markos

Well-known member
VIP
Hi @leakywaders I'm happy that you like the indicator. If you haven't read the different Tutorials, please do. Add to it if you find you are able. :)
For those that don't know, the TMO follows the Delta of Price vs Price itself. Pretty cool. 😎

Please share your chart with a link so others may be inspired or encouraged to see yet another way to Day Trade. Thanks for the community @BenTen 👍
 
D

David45

New member
2019 Donor
Take a look closely at the chart that @BenTen attached yesterday. Markets are Fractal, thus, if one could ignore the after hours showing, it could pass for a daily or weekly chart.

Notice that PRICE is the ULTIMATE indicator! When the fake crossover happened on early Tuesday morning, the trend of the stock was down.

Then before the market opened on Tuesday, the TMO crossed over again. This time it worked.
The little Nuance to see here is that the second divergence was with the 2nd bottom of the TMO cross higher, TMO moving up while the stock was still in a downtrend.

Keep daily on daily and put weekly on weekly aggregations and just observe. They will just jump out at you after a while.
Have you read all of the TMO AND RSI Laguerre information in the Tutorials section? Please do that.
There is discussion of TMO inside some of the RSILg info. Gotta run.
Hi Markos,
Thank you very much for your reply! You had mentioned on a previous post that the TMO is traded at the polarity change signal, not the zero line. I am a visual learner so I was wondering if you could post an image of what you mean by this? It would also be really helpful to see an image of how you determine if a signal is false as you mentioned above. Very much appreciated!
 
markos

markos

Well-known member
VIP
Hi Markos,
Thank you very much for your reply! You had mentioned on a previous post that the TMO is traded at the polarity change signal, not the zero line. I am a visual learner so I was wondering if you could post an image of what you mean by this? It would also be really helpful to see an image of how you determine if a signal is false as you mentioned above. Very much appreciated!
@David45 Give me a while, it may be a week. Just got my cpu back from HP repair. I have to rebuild everything.

In the mean time, please peruse the Tutorials Section. Also, put it on a 1 year daily chart and just observe. That's the best way. IMO, the TMO Daily can drop to -10 and still be valid if it then changes to green and the weekly TMO still looks healthy.

btw, put your triple levered tickers in and look what happened to them on August 24th, 2015. Then look at the whole time frame of the past 5 years.
3x and 2x funds reset at the end of each day. I trust you know what you're playing with... studies that can be googled have show some where both the bull and bear fund have each lost 50% over one year.
 
horserider

horserider

Well-known member
VIP
Just was answering an inquiry about Ultimate RSI and saw this discussion. @David45 As far as I know the polarity change is shown by the change from red to green or vice versa. Anyway I put the TMO standard settings on the example chart I made. Very similar studies. Just goes to show, the numbers can only be manipulated so far before it all becomes the same.

 
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David45

New member
2019 Donor
@David45 Give me a while, it may be a week. Just got my cpu back from HP repair. I have to rebuild everything.

In the mean time, please peruse the Tutorials Section. Also, put it on a 1 year daily chart and just observe. That's the best way. IMO, the TMO Daily can drop to -10 and still be valid if it then changes to green and the weekly TMO still looks healthy.

btw, put your triple levered tickers in and look what happened to them on August 24th, 2015. Then look at the whole time frame of the past 5 years.
3x and 2x funds reset at the end of each day. I trust you know what you're playing with... studies that can be googled have show some where both the bull and bear fund have each lost 50% over one year.
Thank you Markos! I'm sorry you had to rebuild your computer. As a follow up question, I was wondering if you know what causes the TMO to change from red to green and green to red?
 
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David45

New member
2019 Donor
@David45 Someone in the chat recently shared this so I'm dropping it here just in case it could be helpful to you and everyone else.

When @hurricane5 was asked about using the TMO indicator for trading:



Thank you for posting this BenTen. My version of TMO has red and green colored wedges so I'm a bit confused as to what he's saying here. He says the SMA cross is what triggers the alert. So in the example above is the TMO the green line and the SMA the purple line? If so, any idea what time period he is using for the SMA? Thank you!
 
BenTen

BenTen

Administrative
Staff
VIP
@David45 I believe he is using the TMO as confirmation for his SMA crossover on the chart. I do not know which inputs he’s using. The reg/green you see on the TMO is also due to the crossover but from the TMO itself. If you use the indicator on the ToS app you won’t see the fancy red and green wedges.
 
D

David45

New member
2019 Donor
@David45 I believe he is using the TMO as confirmation for his SMA crossover on the chart. I do not know which inputs he’s using. The reg/green you see on the TMO is also due to the crossover but from the TMO itself. If you use the indicator on the ToS app you won’t see the fancy red and green wedges.
Got it! Thank you BenTen.
 
markos

markos

Well-known member
VIP
Got it! Thank you BenTen.
@David45 Please use the Original codes on pages 1 & 2. There are NO wedges in the shared code and it's code has the EMA in it. My charts are mostly EMA as well.
Also, the Math for Delta of Price is above my pay grade. The author is a humble Phd Math Professor.
The "fold" expression in the code is where the "smarts" of the code also comes from. After that comes the EMA and the smoothing factors.
I don't want to figure out how the options market mathematically figures Delta of Price, so I just follow Mobius, the author.

I hope that helps! Good trading to you!
 
markos

markos

Well-known member
VIP
Hi Markos,
Thank you very much for your reply! You had mentioned on a previous post that the TMO is traded at the polarity change signal, not the zero line. I am a visual learner so I was wondering if you could post an image of what you mean by this? It would also be really helpful to see an image of how you determine if a signal is false as you mentioned above. Very much appreciated!
@David45 I'm a visual learner too. Please load this and save as a grid. Notice the difference between actual moves & counter trend moves.


 
D

David45

New member
2019 Donor
@David45 I'm a visual learner too. Please load this and save as a grid. Notice the difference between actual moves & counter trend moves.


Thank you Markos for posting the pictures! It's easier for me to understand when I see it on a chart. I am going to try using the chart that you shared at the beginning of this thread minus the RSI Laguerre. So I'm just going to focus on TMO (Day), TMO (Week) and Slim Ribbon candlesticks to keep it simple. Would you mind explaining how you use them all together to decide whether or not to take a signal? For example, is it when the TMO (DAY), TMO (WEEK) and Slim Ribbon candlestick are all red that you would go short? I'm sure there is much more to it than that but just trying to understand better how you use these indicators collectively on you chart.

Also regarding the actual moves and counter trend moves shown above, how do you determine if the signal is false? I feel like there is some light at the end of the tunnel so thank you so much for your insights!
 
markos

markos

Well-known member
VIP
@David45 Let me say this again. Please load this 3 Grid Chart into ThinkorSwim and Observe. Watch if for a week.

Notice the difference between actual moves & counter trend moves. Please look at the indicator and the price chart and see what is happening.

If you need some assistance with reading charts, ask after you've done your due diligence.

Did you read all of the Tutorials that mention both TMO and RSI Laguerre? I have written on both in either the TMO or RSI Laguerre Threads.
Please use the search bar to find all instances.

I have written extensively on both topics in the Indicator and Tutorial Sections. If you have read them, please do it again.

There is even a video on the Slim Ribbon. Please find it and review it several times. The Ribbon is for Trend, the other 2 are similar for Momentum.

If your intention is to "mess" with Triple Levered ETF's, someone braver than I will have to tell you how they would go about trading them. Thanks.
 
D

David45

New member
2019 Donor
@David45 Let me say this again. Please load this 3 Grid Chart into ThinkorSwim and Observe. Watch if for a week.

Notice the difference between actual moves & counter trend moves. Please look at the indicator and the price chart and see what is happening.

If you need some assistance with reading charts, ask after you've done your due diligence.

Did you read all of the Tutorials that mention both TMO and RSI Laguerre? I have written on both in either the TMO or RSI Laguerre Threads.
Please use the search bar to find all instances.

I have written extensively on both topics in the Indicator and Tutorial Sections. If you have read them, please do it again.

There is even a video on the Slim Ribbon. Please find it and review it several times. The Ribbon is for Trend, the other 2 are similar for Momentum.

If your intention is to "mess" with Triple Levered ETF's, someone braver than I will have to tell you how they would go about trading them. Thanks.
Thanks Markos. Good advice. I'll be watching the 3 grid chart for a few weeks to try and gain a better understanding of how to use this indicator. I think part of why I am struggling a bit is because it seems as though most of the traders here are day traders, trade futures, or trade options. I do not trade intraday nor do I trade futures or options. I've been swing trading for about 10 years using various PCFs and East Scans I created using TeleChart. I was trading individual stocks and focused mainly on momentum breakouts using various parameters of trend intensity.

My day job and family commitments are now so demanding that I have very little time to devote to trading. So I have switched to an ETF based swing trading method to catch the major trends long and short on the Nasdaq 100. So basically 5 or 6 signals total from October 2018 to present. I'm not tied to using triple ETFs but they move more like stocks in terms of how much they move up and down.

Unfortunately, trend intensity does not work very well for trading ETFs. Since I already have a TDA account I thought I would try TOS. I have been trying various settings of the Detrended Price Oscillator, Ray Bear Power, and Qstick. Simply going long and short when they break above or below the zero mid line. But they all tend to get me into the trend a bit late on both the long and short side and are prone to false signals and whipsaws, especially using the shorter periods.

The True Momentum Oscillator seems like it might work a bit better for what I am trying to achieve. I read the tutorials but all I can conclude in terms of trying to keep things simple is to go short when it crosses below the +10 line and go long when it crosses above the -10 line. I have no idea what to do when it changes color in between these two signal lines. Like the other oscillators I have been trying, the TMO also seems prone to some false signals and whipsaws albeit to a lesser degree and it seems to get you into the trend earlier both long and short. I can easily see the difference between the actual moves and the counter trend moves. What I cannot see is how I would know the signal is false and not to take it. Getting in the trend early and avoiding false signals/whipsaws at all costs are my primary objectives. Maybe I will have an aha moment the more I look at it.

I really appreciate all of your help and insights. If there are any other indicators or oscillators that you think would also be useful for what I am trying to achieve I would love to hear about them. Horserider's Ultimate RSI looks very promising as well.
 
markos

markos

Well-known member
VIP
@David45 Let me mark this up over the next few days and I'll post what I see on the chart that will better answer your specific questions.
I work a 60 hour week, have a family and am disabled to boot. I understand your situation. Give me some time to come up with something.
Besides watching this 3 Grid Chart, go to investopedia.com and read about how some indicators work.
Don't go off the trail though. Just read to gain point of view. This is the set-up I made for you. Down the road you can use the slim ribbons as I do.
For now this chart has nothing on it but the indicator to remove any distractions from the conversation.
 
D

diazlaz

Well-known member
2019 Donor
VIP
Hi Markos, thanks for your guidance. You mention that you use the slim indicators in your trading, have you tried and paired up True Momentum Oscillator
 
D

David45

New member
2019 Donor
@David45 Let me mark this up over the next few days and I'll post what I see on the chart that will better answer your specific questions.
I work a 60 hour week, have a family and am disabled to boot. I understand your situation. Give me some time to come up with something.
Besides watching this 3 Grid Chart, go to investopedia.com and read about how some indicators work.
Don't go off the trail though. Just read to gain point of view. This is the set-up I made for you. Down the road you can use the slim ribbons as I do.
For now this chart has nothing on it but the indicator to remove any distractions from the conversation.
Thank you so much Markos! Wow your days are very busy like mine. I really appreciate all of your guidance in how to truly understand and best utilize this indicator.
 

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