This week I released one of my new favorite studies, Relative Strength, which instead of plotting relative strength as a basic close line graph, it can plot it as a candle chart or a bar graph, so you can trade relative strength price action. It also includes a bunch of extra features that the normal line graph study doesn’t have, such as moving averages, 4 breakout/breakdown signals, 6 bullish and 6 bearish divergence signals over multiple periods, etc. Check it out here.
I’ve also posted some updates to both Big Levels and Premarket Range to add optional summary labels to each one. That way you can use them just to display information on your chart, without any lines, or you can use just the lines, or you can use both together.
As always, prior purchasers get upgraded for free, so just log back in to your My Account > Orders page, and click the green “View” order details button beside your old order. The new links should be there waiting.
I wanted to take a minute and tell you guys about my new Multiple Timeframe VWAP indicator for ThinkOrSwim. Most of you guys know I love volume, and recently (in the past year) I’ve started trading based on VWAP, or volume weighted average price. VWAP just makes sense: it’s the rolling average price at which the most volume traded during the current time frame (usually day). It’s a good indicator of what the most fair price is for that timeframe.
For VWAP to work, it has to reset at a certain time. Most people look at daily VWAP which resets overnight, either at midnight or at the start of regular hours trading. Longer term traders often look at yearly VWAP, which resets each year on January 1st.
But you can calculate VWAPs for any timeframe, and I’ve found that 1-hour VWAPs and 4-hour VWAPs are incredibly useful — in addition to the normal daily VWAP — both as a gauge of fair value on range-bound days, and as a support or resistance point on trending days.
Here’s a great example from a chart I pulled up the other day, where the gray line is 4-hour multiple timeframe VWAP, and the red/blue line is the 1-hour VWAP:
The arrows in the afternoon point out some extremely precise pivot lows that happened RIGHT AT the 4-hour multiple timeframe VWAP. The squiggles show some examples of the hourly VWAP acting as intraday support.
Anyway, I don’t know if I’m the only one that looks at these types of intraday VWAPs, but I find them incredibly useful for evaluating trade locations.
Up until now, I had been using Sierra Chart to plot the intraday multiple timeframe VWAP because ThinkOrSwim had no ability to plot them. I have several VWAP indicators including the built-in indicator in TOS, and none of them had the ability to specify your own intraday reset period. So I decided to devote some time to developing my own so that I could get rid of the second platform and keep things a little more streamlined.
After some real struggles, I was finally able to solve the problem of resetting the VWAP at different custom periods. I also added in some features that I’d kind of wished my other indicators had, such as color-coding the VWAP line based on whether price is above or below the line (similar to the VWAP indicator available in TradeStation). And I also threw in the ability to plot standard deviation lines around VWAP as well so you can visually see how far extended price is getting away from “fair value”.
So anyway, I recently posted the thinkscript code for my multiple timeframe intraday VWAP for sale on my ThinkOrSwim Downloads shop in case anyone else is interested in this indicator. Like I said, I don’t think most people are even aware this kind of indicator exists and so it’s pretty uncharted territory, but I think from my experience there is some good edge to be exploited here. But anyway, I would love to hear from you in the comments whether or not you’ve heard of people using this before. And if you’re interested in the indicator itself, here’s the link:
Multiple Timeframe OHLC Levels Indicator for ThinkOrSwim
The multiple timeframe OHLC levels indicator plots the open, high, low, and/or close for a specified time frame (hour, day, week, month, etc.) on a lower time frame chart.
Say you’re trading on a 5 minute chart, and you want to be aware of important nearby price levels. You can add the OHLC levels for the prior day, prior week, prior month, etc. You can also add the levels for the current day, week, month, etc., or 3 days ago, or any other combinations you can think of.
In addition, you can selectively turn off certain values you don’t want (the closing price for the current day, for instance). The indicator automatically takes premarket data into consideration if you have it displayed on the chart, or ignores it if it is turned off, and just uses the regular hours OHLC values instead.
These levels can be incredibly important. I’ve found several levels to be of particular importance: yesterday’s range, last week’s range, and often last month’s range. When you’re a few days into a new trading week, the current week’s range can also be important. I’ve also found the pre market range and the initial balance range to be important as well if you want to add some additional automatic support and resistance points to your chart.
Take a look at the example below and you can easily see how prices tend to respect the OHLC levels from current and prior days and higher time frames.
Hi guys, I’m Josiah, and I’m a trader/programmer from the Nashville, TN area. I recently finished up both a bachelor’s and a master’s degree in Computer Information Systems at a local university and have been self-employed since then, trading and developing projects with Ruby on Rails on the side. Since I was already familiar with a certain amount of programming, and had an active interest in trading and investing, learning ThinkScript — the scripting language for the ThinkOrSwim platform — made a lot of sense, and helped me develop a platform configuration that really streamlined my trading workflow.
About the ThinkScripts
These basically came about because I got so frustrated with the limited built-in capabilities in TOS, and standalone subscription services that charge $99+/month. So I decided to learn ThinkScript so I could develop indicators and scans for myself. I still use most of these thinkscripts every day while trading.
Josiah is a stock trader, thinkScript programmer, real estate investor, and budding mountaineer. He's also rumored to be an in-shower opera singer. Josiah & his family live in Nashville, TN. Twitter | YouTube
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