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Multiple Timeframe Simple Moving Averages

higher timeframe SMA example chart

Multiple Timeframe Simple Moving Averages Indicator for ThinkOrSwim

In the type of trading I do, I rely heavily on the 20-period simple moving average as a reference point for intraday trend identification. My mentors taught me to trade on a lower timeframe, such as the 5-minute chart early in the morning, or the 15-minute chart later in the day, but take my directional cues from a higher timeframe chart. So I look at multiple timeframe simple moving averages.

But no matter what chart I’m focused on, the goal is always to trade in with the bigger trend. Basically, the goal is to trade in harmony with the larger forces that are at play. To accomplish this, I use multi-timeframe analysis of a single stock — keeping multiple charts of the stock open at one time. And depending on the time of day, I might have a 1′ or 5′ chart, a 15′ or 60′ chart, and the daily chart open.

Multiple timeframe simple moving averages indicator for thinkorswim - AddToChart
Multiple timeframe simple moving averages indicator for thinkorswim – AddToChart

I soon began to realize that it would help me simplify things and conserve screen space if I could analyze the higher timeframe charts while only using the lower timeframe chart. After all, the same data is all there, it’s just presented differently. Over time, one way I’ve found to do this is by calculating a higher timeframe simple moving average and displaying it on a lower timeframe. This will tell me how extended price is on multiple timeframes, or how deep a pullback is and thus how attractive a given setup looks across multiple charts, all without leaving the chart I’m currently working from. You will be surprised at how often a 20 period simple moving average from, say, a 15′ chart, acts as support on a 5′ or 2′ chart.

The Wrong Solution

Multiple timeframe simple moving averages indicator for thinkorswim - properties
Multiple timeframe simple moving averages indicator for thinkorswim – properties

To make a multiple timeframe simple moving averages indicator accurately show a higher timeframe average on a lower timeframe, you can’t just use a longer SMA on the same chart. There are subtle but real differences in the locations of the averages because more data is used to calculate the longer SMA from the lower timeframe chart. I’ve found that the true higher timeframe averages are more reliable as support and resistance, since they are what longer-term traders are actually looking at and basing their trades on.

The Right Solution

So to solve this dilemma and make life easier on myself, I developed the multiple timeframe simple moving averages indicator for ThinkOrSwim. It’s a chart study that allows me to add ANY higher timeframe SMA to any lower timeframe chart. I trade off the 20 SMA, but if you trade the 21, 10, or 50, this indicator can easily work for those as well.

It can also allow you to plot multiple higher timeframe averages on the same chart. Say you’re on a 2′ and like using the 10-period SMA on higher timeframes. You can add the 10-period SMA from the 5′, 10′, 15′, 30′, 60′, and 4-hour, etc., all on the same 2′ chart at the same time. Or you could mix it up and add the 50 period from one timeframe, the 20 period from another timeframe, and the 10 period from yet another timeframe, all on the same lower timeframe chart. The possibilities are pretty endless and can easily accommodate whatever your trading system needs. You can also custom color-code each higher timeframe SMA to make them easily identifiable.

Check out the screenshots and the video and let me know if you have any questions.

 


$99.99 $69.99Add to cart

 

 

highertimeframeSMAexamplechart

 


$99.99 $69.99Add to cart

 

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Position Size Calculator with Entry and Stop

High Low Entry Stop Calculator - Example 15 minute chart

Position Size Calculator for ThinkOrSwim

Position Size Calculator for ThinkOrSwim - properties
Position Size Calculator for ThinkOrSwim – properties

The position size calculator for ThinkOrSwim is a simple but important ThinkScript I made that allows me to instantly know what my entry, stop, and position size should be in order to maintain an equal risk on every trade I take.

One issue many new traders face is inconsistency — especially having losing trades that are larger than their winners. This is a recipe for disaster in trading. The more variables you can control in a trade, the less likely you are to screw up and lose a lot of money, and therefore the more consistent and predictable your returns will be. And one important aspect of controlling those variables and smoothing out your growth curve is sizing your positions correctly every time. And this indicator helps you do just that.

Basically, this indicator allows you to specify what size bar you want to size your entries off of (say a 15′ candle for example). No matter what chart you’re looking at (it could be a 5′ or 2′ chart for instance), this indicator will allow you to know what the latest 15′ bar’s high and low is, and how many shares you would need to buy in order to properly size an entry based on that 15′ candle.

Example of what the entry and Position Size Calculator for ThinkOrSwim shows you

Example of what the entry and Position Size Calculator for ThinkOrSwim shows you

It could just as easily be that I’m looking at a 5′ chart and want to know how to size my positions correctly for a 5′ candle high/low entry and stop — this indicator can handle that too. One glance and you know how to enter your orders — no calculator needed.

Features:

  • Specify in advance how much you want to risk on each trade — could be $25 or $1000.
  • Add a few cents of padding to the entry and stop if desired. Calculations adjust automatically.
  • Tells you your entry price, stop price, stop size, and the number of shares to order.

Take a look at the screenshots and the video and let me know if you have any questions!


$129.99 $109.99Add to cart

 

Position Size Calculator for ThinkOrSwim - example 5 minute chart
Position Size Calculator for ThinkOrSwim – example 5 minute chart with a 15 minute entry

 

Position Size Calculator for ThinkOrSwim - Example 15 minute chart
Position Size Calculator for ThinkOrSwim – Example 15 minute chart with a 15 minute entry

 

$99.99 $49.99Add to cart

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Whole Numbers Indicator for ThinkOrSwim

AUD/USD Pscyhological Whole Figure Numbers

Whole Numbers Indicator for ThinkOrSwim

Whole Numbers indicator - properties window
Whole Numbers indicator – properties window

We’re traders, but we’re also human … and the human brain gravitates toward simplicity. That’s one of the reasons why in trading, there’s just something about whole numbers or round figures. Our brains just like seeing numbers like fifties, hundreds, tens, and thousands, better than more complex numbers. Because of that, more often than not, stock price trends always seem to change direction near whole numbers like these. I know several professional traders who check nearby whole numbers before taking any trade. They assess whether there is good room to target before the next round number, and determine if an entry should be delayed until a nearby round number is reached. And that is why I have created a whole numbers indicator for ThinkOrSwim.

I programmed this whole numbers indicator so you’ll be able to easily identify the areas where there’s a greater likelihood of short term or long term reversal. When price is approaching a whole figure, you’ll be able to see the area on the chart without guessing. Now you’ll never have to worry about forgetting to check for these nearby “psychological figures” before placing your trades, because you’ll be automatically reminded of them in advance.

Whole Numbers indicator - add to chart
Whole Numbers indicator – add to chart

Flexibility

One issue with an indicator like this is that it has to be able to adjust to the instrument you’re trading. Forex, for instance, operates on totally different whole numbers than stocks do, because in forex every round number is a fraction of 1. So I specifically made this indicator to work on multiple types of instruments so that the whole number lines spread out as the instrument’s price gets larger. Result: this indicator works for stocks, futures, penny stocks, and forex.

The color of each line, as well as individual line thickness and style (solid, dashed, dotted, etc.) are all completely customizable. And you can also turn on/off the price bubble for each line on the right side of the chart. In addition, you can specify in the properties whether you want the indicator to show single digit levels below $10, and .05 increment levels below $2, so you can remove clutter you don’t want.

How it Works

The numbers highlighted by default are as follows:

  • Counting by .05s from 0 – 2: (.05 .1 .15 .2 .25, etc. — these are good for forex and penny stocks)
  • Counting by 1s from 0 – 10
  • Counting by 10s from 0 – 300
  • Counting by 25s from 0 – 500
  • Counting by 50s from 0 – 1000

Hopefully you’ll find this as useful as I do. Please check out these screenshots of the whole numbers indicator and contact me if you have any questions!


$99.99 $79.99Add to cart

 

AUD/USD Psychological Whole Numbers indicator
AUD/USD Psychological Whole Numbers indicator


$99.99 $79.99Add to cart