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New Trading Strategies for ThinkOrSwim Published

thinkorswim trading strategies

New ThinkOrSwim Trading Strategies Published

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.

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Free: Volatility Normalized MACD-V

Awhile back I had a trader email requesting I code this indicator for Thinkorswim. At the time I wasn’t able to get to it, and I’ve subsequently lost the email, so I thought I would put this out there in the universe in case he happens to run across it here, and in case anyone else can use it.

Easycators Volatility Normalized MACD-V implementation: http://tos.mx/1VziaCe

And here’s the research paper with the details:

https://bit.ly/3El2L9V

“The output of the indicator is
the amount of momentum a security has,
that is in excess of its average volatility,
expressed as a percentage.
We are measuring directional strength,
“purified” from volatility fluctuations”

Alex Spiroglou
Traditional MACD vs. Volatility Normalized MACD-V for Thinkorswim
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Updates to AutoFibs / Automatic Fibonacci Levels

As usual I’ve been at work updating the scripts from time to time with new feature ideas, and one client recently mentioned that there weren’t any recent posts on the website, so I thought I’d better start being more diligent about letting people know when I release updates. I’ll try to do that going forward.

The latest update I wanted to mention is that I’ve added some unique capabilities to the AutoFibs ZigZag functionality that lets you draw the levels based on any of the 3 most recent swings (zigzags), but then also plot or project the levels from any of the 3 most recent swings that you want as well.

This is interesting for finding points of symmetry and price targets for take profit orders.

So you could, for instance, base the levels on the range of 3 swings ago, and then project forward from the current swing high, as in this example:

Thinkorswim Indicators - Automatic Fibonacci levels study - AutoFibs example
Thinkorswim Indicators – Automatic Fibonacci levels study – AutoFibs example

Here are the new settings to control the behavior:

Thinkorswim Indicators - Automatic Fibonacci levels study - AutoFibs settings 2
Thinkorswim Indicators – Automatic Fibonacci levels study – AutoFibs settings

The functionality is similar to the built in 3-points Fibs Extensions tool that comes with TOS, only the indicator makes the process automatic for you.

Thinkorswim Indicators - Automatic Fibonacci levels study - AutoFibs drawing tool comparison
Thinkorswim Indicators – Automatic Fibonacci levels study – AutoFibs drawing tool comparison

Existing clients – please go to My Account / Orders and click the VIEW button to pull up your order details and download the latest version there. This is where you can get access to all future updates for free as usual.

Prospective clients – please click here to purchase and download the latest version of AutoFibs for Thinkorswim!

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Full TMO Relative Strength Set added to the existing Relative Strength Package for Thinkorswim

ROL Rollins TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim

New TMO Relative Strength indicator and strategy set added to the existing Relative Strength set

This is a new approach or strategy that I think is valuable enough to share with everyone on my site. This is the TMO, or True Momentum Oscillator, which you may have seen or heard of previously from Mobius. The plain vanilla TMO is a great indicator in its own right, even by itself. However, I’ve found that by combining it with Relative Strength, the results are truly impressive.

TSLA Tesla TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim
TSLA Tesla TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim

The idea behind this new script is to calculate the TMO for 3 different sources:

  1. The stock itself
  2. A market index symbol such as SPX or /NQ
  3. The relative strength ratio of the stock divided by the index symbol

Then, by comparing the TMO output of each of these sources, we can identify points in time where the stock’s momentum first begins to outperform the overall market early on, while it’s still trading inside a base or pullback pattern.

Thinkorswim Relative Strength TMO True Momentum Oscillator Scanner and Signals Column - Sidebar
Thinkorswim Relative Strength TMO True Momentum Oscillator Scanner and Signals Column – Sidebar

The remarkable thing to me is that this strategy can be broadly profitable on most stocks just using the built-in divergence signals between the 3 TMOs, and no additional filters like MAs or other trend filters.

The other remarkable feature is that this seems to be a timeless source of edge: if many people start using these signals, it will likely create new divergences to take advantage of.

The set comes with a scan, column, 2 indicators, and a strategy for backtesting, and by default it compares the currently-charted stock to the SPX through the lens of the TMO.

This suite of tools is available for free to anyone who has previously purchased the Relative Strength indicator set, and from now on it will also be included for new customers as well.

Click here to get the TMO Relative Strength set for Thinkorswim!

DE John Deere TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim
DE John Deere TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim
Thinkorswim Relative Strength TMO True Momentum Oscillator Scanner and Signals Column
Thinkorswim Relative Strength TMO True Momentum Oscillator Scanner and Signals Column