Using DMI +/- with the TTM Squeeze in ThinkorSwim

[Hypoluxa]

This is a follow up from a post I did regarding just the DMI +/- at the opening bell....and for me to show examples of how to use the TTM squeeze with the DMI +/- at the opening bell. If you recall, I found a strategy with the DMI that shows when the 1min and 3min DMI charts both clearly show the DI+ lines clearly on top or the DM- lines are clearly on the top...you will stand a very good chance at getting a quick option scalp by purchasing the call or put that matches the DMI lines and now the TTM squeeze.

Now...the one critical indicator you need to use to 100% confirm that its going to go in that direction at the open or just after the open, is the TTM squeeze. If the DMI lines are both clearly green on top...make sure the TTM bars are light blue on BOTH the 1min and 3min chart...that confirms upward movement at the bell - see the SPY screenshot for this example...look at 9:30 to see DMI separation and light blue TTM bars on both the 1min and 3min chart.

The same logic applies when the DMI's are red on both charts...but now you need to confirm with the TTM that the bars are red on both charts. Look at the NVDA screenshot to see this example...you can clearly see a major drop at the opening bell and confirmation from DMI and TTM squeeze.

**Make sure to set your DMI to 100

 

[pkcfc]

Does this only apply for market open or can it be applied for any time during the market hours

 

[Hypoluxa]

Does this only apply for market open or can it be applied for any time during the market hours

What I'm explaining here is strictly for the open. However, you can most definitely use the TTM and DMI combinations for the remainder of the day.

For the TTM - Light blue is an up signal and dark blue is showing a downswing.
Red comes after dark blue which means its in a dip and yellow means its coming out of the dip.
In a perfect indication, the colors will flow as: light blue to dark blue to red to yellow and then back to light blue.
The one thing that keeps me in the trade for an option scalp is the 3min TTM...take a look at the NVDA photo on the right side...it flows just as I have described here.

The DMI alone can be used as an indication of direction as well: when the lines crossover to match each other on the 1min and 3min charts, buy according to that move. Double green - buy a call. When double red - buy a put.

 

[salehz94]

@Hypoluxa on which candle do you usually enter the trade. Do you enter at the close of the first 1 min candle or the 3min candle? Or second 3min candle?

 

[Hypoluxa]

@Hypoluxa on which candle do you usually enter the trade. Do you enter at the close of the first 1 min candle or the 3min candle? Or second 3min candle?

Its been so long since I used this setup...that I cant remember. So I'm not confident that any of that logic would still apply in this years trading conditions.

 

[salehz94]

Its been so long since i used this setup...that I cant remember.

Hahahaha. Is it no longer relevant? @Hypoluxa

 

[Hypoluxa]

Hahahaha. Is it no longer relevant? @Hypoluxa

I wouldn't say its no longer relevant...I have moved on to different setups the past couple of months, as well as not trying to trade 6-10 stocks a day. And one thing I'm noticing with setups from last year...is that they need to be tweaked as time goes on....because the markets buying and selling habits change throughout the year. So that's why I say that IDK if it'll work now or not without some tweaking to the settings.

 

[rad14733]

I don't understand how you can purchase the call or put at market.open (9:30) based off the 1mim and 3min charts.

Don't you need to wait until at least 9:33?

If you have extended hours enabled you can see all of the trades leading up to the open... But beyond that, if the momentum is strong enough and in the right direction you could still enter a trade... I trade opening momentum often and those can be the most profitable scalps...

 

[jdouglas2002]

Makes sense! Thanks.

Maybe post some trades to do. Entry time and price, exit time and price. Just so I can see what you're doing to understand better.

 

[Hypoluxa]

I don't understand how you can purchase the call or put at market.open (9:30) based off the 1mim and 3min charts.

Don't you need to wait until at least 9:33?

I don’t use this deal any longer, so I can’t really answer that in current trading conditions

 

[Hypoluxa]

I'm no longer using this strategy, so I no longer know if it still works or not and can't answer any questions about it going forward