VISUAL OPTIONS TRADING FOR TOS
If I were to write a book about options trading it would be titled “VISUAL OPTIONS TRADING” with the subtitle “If you can’t see it, why trade it”?
Question: Is eyesight our most important sense? If, not I’m not sure what would take its place?
A published study “All About Vision” tells us that "vision is a two-part process that is first seen and then processed by the brain". This two-part “process” is probably the most important formula for becoming a profitable retail trader (“SEE” -“PROCESS” - "TRADE").
Eyes have the ability to focus on and capture an image (i.e., an options chart with proper indicators and labels is an image) and what we see needs to be interpreted by the brain “BEFORE” we can make sense of what we’re seeing! This is probably why “Seeing Is Believing” is a well-known proverb, and why “Eye Witnesses” are an invaluable part of our legal system.
Adam Debrowski states that “our sense of sight is responsible for most of the information we absorb from our five combined senses.” It is for this reason that all of my charts for options trading that have put together through the years are geared towards finding trades from a "visual" perspective.
My moniker here on useThinkScript.com is AGAIG (AsGoodAsItGets). Actually I have a blank chart on my screen where nearly every post made on this site is loaded and tested.
My goal is to continually adopt charting and/or indicators that one can immediately see where a stock (ETF) is trending and what the next price move might be. This task is accomplished by using multiple indicators analyzing the same parameters while using slightly different inputs to show mathematically what is taking place. A good friend of mine (who is a great trader) says “follow the flow.”
Since the market was developed mathematically, and because many individuals tend to be challenged when it comes to understanding multiple computations at the same time (mainly the Greeks), it is my goal to make charting and indicators as “Visually Simple” as possible.
Today, I want to discuss an Indicator titled “New & Improved Smoothed RSI Dynamic Range w/RSR (a long title).
The original was developed by Merry Day in 1/24 for VIP members and she’s updating to the New & Improved version.
This might seem like a complicated indicator with multiple lines of code to make it work. It is a “lower indicator” (and I don’t much like lower indicators) unless they are highly visual and can be recognized very quickly in combination with my upper charting and dashboard. This indicator accomplishes that very nicely!
SADLY, this indicator is for VIP traders only (but may be worth the price of becoming VIP since many of the other VIP indicators are great as well). Hopefully this one will be highlighted in one of the weekly Your useThinkScript Updates and/or the Newsletter?
First, I will admit to removing the labels as they are a bit of a distraction to me. The visual parts are the upper and lower lines (potential changes in direction) with a clearly defined MA (moving average) red/green line which follows price. Since this is an oscillator it shows trailing history which makes it an easy to follow visual. The upper/lower lines frequently make good entry/exit points.
If you are a VIP member you can luckily add this to your charting (hopefully to charting I have already published under the AGAIG moniker).
I have also added this indicator to my personal AGAIG 4Chart 2min Screen
and will try to add it to the VIP section of useThinkScript in the near future.
The current “non-VIP” 4chart link is:
https://usethinkscript.com/threads/agaig-4chart-2min-screen-for-thinkorswim.19357/
Happy Visual Trading!
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