I’ve recently posted several strategy scripts to the website that identify quantifiable edges for my fellow traders. These ThinkOrSwim trading strategies can be traded standalone, or tweaked further and customized to fit an individual’s trading style. They can either be used to setup automated trading systems in other platforms, or traded manually within ThinkOrSwim and improved with price action trading principles. My most recent strategies are all listed under the strategies category on the site, and here’s a quick reference list:
Most of these strategies come straight out of Larry Connors and Cesar Alvarez’s book “Short Term Trading Strategies that Work,” and are specifically for trading the SPY, SPX, or ES futures. But these ThinkOrSwim trading strategies may also provide edges on other instruments, and you can test them on whatever symbols you like to trade, to see if they can be applied profitably there as well.
I hope these strategies are as intriguing to you as they were to me, and hopefully they will provide you a more quantifiable way to determine your edge in the market as well.
I recently finished up a complete redesign of my ThinkOrSwim Position Sizer, and I wanted to post a quick announcement and go over some of the new features. I’m pretty excited about what I’ve been able to do with it, and I really hope others will find it as useful as I do.
The original implementation was basically a candle high/low position sizer. It calculated entries 1 tick above the high and your stop was 1 tick below the low of the candle, and it would size your position based on that stop size. Additionally, it only worked on stocks. I had originally made it to help me quickly calculate price action entries and exits and get the right number of shares each time, and it did that well for me, but wasn’t very flexible for other traders’ needs.
The new indicator is completely different and vastly more powerful.
Works on Stocks, ETFs, and now Futures too!
Automatically account for the minimum tick size and tick value of futures contracts
Choose a percent of your buying power to risk on each trade
Script automatically grabs your current account balance and calculates the right amount of shares/contracts to buy based on your predefined risk tolerance
Optionally specify a manual/theoretical account balance
Specify a buying power multiple (2x or 4x account balance, etc., or just leave at 1x to use no margin leverage)
NEW STOP TYPES!
Candle/bar price action stops and entries as before
Specify a custom ATR multiple to use for stops
Change every aspect of how the ATR is calculated if desired
Choose between 4 different DevStop standard deviation levels
New entry methods!
Choose trade direction, long or short
Specify to calculate entries from the close, open, high, or low
Add custom padding for slippage or breakout entries to both entries and stops
Example 1: enter 1 tick above the high of a candle, stop 1 tick below the low, etc., to simulate a stop-market entry and exit
Example 2: assume 1 tick slippage on entries and stops, regardless of entry type
New target methods!
Choose an automatic target based on a multiple of your risk (stop size).
Example: if your stop size is $2, you can specify a 1:2 risk/reward ratio, and it will automatically calculate your target price as $4 above your entry
Choose a manual target price for your trade and automatically get the risk/reward in both Risk Units (Rs) or in percentage terms
Optionally round the shares or contracts to the nearest 10, 100, or whatever other number you specify
Show/hide any labels or lines on the chart
Change label and line colors as desired
Question mark icon / Tooltip for each option explains every setting in detail
How to Get the Updated Version
A quick note: previous purchasers will OF COURSE get the updated version for free! I really appreciate your support, and the updated links will be waiting for you in the My Account area under My Orders, as with all updates I release. If you have any trouble getting the links, just contact me and I’ll make sure you get setup.
If you haven’t purchased the Think-Or-Swim Position Sizer yet but you think it will be of benefit to your trading, you can pick up your copy here:
Scanning with Options Hacker: A ThinkOrSwim Tutorial
I noticed that there is not very much information out there on the Options Hacker scanner for TOS. Because of that, I wanted to do a quick ThinkOrSwim tutorial on Options Hacker and at least note some of the differences between it and Stock Hacker to clear up some of the confusion. This article will explain the basic features of Options Hacker, and the steps to setting up a custom option scan in Think-Or-Swim. It also notes the differences between the Stock Hacker and Options Hacker scanners.
Options Hacker Differences
So why can’t you just use Stock Hacker? Well, you can, and sometimes it may be easier. But Options Hacker is good for keeping the two types of scans separate and keeping your settings the same when switching back and forth between trading and analyzing the two.
In Options Hacker, you will still be filtering down a list of stocks first of all, just like in Stock Hacker. You can use all your normal filters: price, volume, average volume, price performance, etc. You can even add custom study filters here for the underlying stocks. It’s important to note that the study filters only work for the stocks. You can’t currently program any custom studies to use for option filters. You can use the new Fundamental Filters they just recently made available in TOS. These can be very helpful for you value investors and longer-term traders out there.
After you get the stocks narrowed down to only the ones you would be interested in, now it’s time to filter down the stock options. Here you can add any option attribute available: open interest, delta, price, etc. You can’t currently scan for option bid-ask spread, but with a custom column I made, you can at least sort the results to show the lowest spreads at the top.
Saving Your Option Scan
To Save your new options scan, click on the lower menu icon on the top right corner (see gif) and select “Save Scan Query”. Once you’ve given it a name, it will show up in your list of custom scans under the “Personal” section. To load any scan, including this one, simply click the same menu icon and select “Load Scan Query.” Then move your mouse over the Personal section of the menu, which is in alphabetical order, to whatever you named your scan. When you click on the name it will automatically load onto the scanner window below.
Hopefully that helps. One of the most confusing things about Options Hacker is that the Study filters don’t work on options, they only work on stocks. You might think since it’s called Options Hacker, when you scan for the closing price or the ATR, it would be calculating those with the options prices. But that’s just not the case currently. You can only use the built in options filters to filter the options, you have to use the other types of filters for the underlying stocks.
For those of you who are more visual learners, I also made a short video where I show you how to set up a customized option scan in think or swim. In it, I show you step by step how to add stock filters, option filters, and custom study filters for the underlying stock. I show you how to narrow and sort the results, and finally, how to save the scan to use later. You can find the full video at the bottom of this post.
I just released an improvement update for the higher time frame moving averages chart study. Any customers who already bought it and use it will of course have free access to the update. The updated link to import the new indicator should already be in your order history under my account, but if you have any trouble getting it just contact me directly and I’ll make sure you get the updated version.
Traders who purchase it from now on will get the improved version which now supports any of the built-in moving averages in ThinkOrSwim, and additionally lets you choose your moving average’s price type (close, open, high, low, etc.).
As in the prior version, you can select the plot color and style, which higher timeframe you want to calculate the average from, how many periods to calculate the average from, etc. This version is just a bit higher quality and more flexible.
Here are some screen shots of the indicator and the updated settings menu: