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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
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Use Thinkorswim’s Premarket Gap Scanner to find Gap & Go Setups

use thinkorswims premarket gap scanner to find gap and go setups

Thinkorswim offers a premarket gap scanner that can be used in a multitude of ways. One of the things that it can be used for is to find gap & go setups. This might sound like a foreign concept to you. If you don’t know the ins and outs just yet, don’t worry because that’s exactly what we’re going to be talking about in this article. As such, if you would like to find out more about how you can use Thinkorswim’s premarket gap scanner to find gap & go set ups, then keep reading down below.

What Is The Pre-Market Gap Scanner?

Gaps are measured from the market’s closing price the day before to the current day’s opening price. A gap occurs when a stock opens at a higher price the next day than it closed at the previous day. However, gaps can be up or down and can occur with all stocks from all markets. 

A pre-market gap scanner is a series of scanners that are used to find the highest gapping stocks before the market opens. The gaps are important to identify as they show a sudden move by any given stock, which are often the indicator that a bigger move is coming. If you keep on top of the gaps with a pre-market gap scanner, you will be able to make better informed decisions using all the information that is available to you.

Why Use A Pre-Market Gap Scanner?

If you are closely monitoring the premarket trading activity, you are likely on the way to edging out the competition. This will help you with your day trading by providing you with insight other traders may not have. As such, you can start the trading day the right way, with all the information you need at your fingertips.

It is important for you to understand, however, that pre-market trading volume is often light, so you won’t see massive differences in the stocks. As such, when you are using a scanner, make sure that you are only looking at stocks that are trading with above-average premarket volume. This will give you the insight that you need for potential trades.

How Can It Be Used To Find Gaps?

First off, you will want to: 

  1. Run a scan, which can be done by clicking the scan button on the top of the screen. 
  2. From here, it will give you a range of defaults, but you should delete these and start over for the best results. 
  3. You can add filters to your search and one of these is ‘stock.’ If you click on ‘stock’, then change it to ‘last’ you will get a list of yesterday’s stocks. 
  4. You can set the minimum and maximum range of money for the stock price, so you can set this for the pierce range that you are looking for. The smaller the range, the less data there is going to be for you to go through. You can set this up however you want to but you’re also not going to get much from the gap scan if you set your limit too high because the percentage moves don’t tend to be there. 
  5. Once you have done this, you want to add another filter, then click on stock again. This time you’re going to be selecting the volume. Think carefully about the threshold that you want to set here so that you are getting the right data.
  6. There are of course, other filters that you can go through such as the ‘study’ filter which will give you more options to choose from. 
  7. There are also the patent option and fundamental filters for you to use depending on what you are searching for specifically. 
  8. After you have added all of your filters, click scan and then there will be a list of stocks for you to sort through. 
  9. You can add in things such as the mark percent change if you would like to filter them further which will help you find the gaps that you want to trade.

Advantages Of Gap & Go Setups

Gap & Go setups have a number of advantages which is why a lot of people choose to trade this way. The first is that it is possible to make high profits using this system. They are also super easy to identify, making your life so much easier than if you were to use one of the other strategies out there. 

If you manage to find stocks that have good volume, they will largely prove to be reliable and allow for little chance of manipulation. This means that you are getting the most out of the stocks on the market. 

The final advantage that we are going to look at is that it is perfect for day trading the market open. You want to trade at the market open or just after when it comes to gap & go setups as this is how you find the best gaps in the market. As such, if you are someone who likes to trade when the market opens as opposed to throughout the day, this is the strategy for you.

So, the advantages summed up are as follows:

  • You can see high profits
  • Gaps are easy to identify, especially using a premarket scanner like the one offered by Thinkorswim
  • Reliable information that you can use for the days trading
  • It is perfect for day trading the market open

Why Use A Scanner To Find Gaps?

This is the easiest way to find the gaps on the market. If you are going to trade gaps successfully, then the premarket scanner will search for stocks that have volume in the premarket. Every morning there are new gapping stocks that update on the pre market scanners, allowing for those people who are ready to get ready.

We hope that you have found this article helpful, and now have a better understanding of how you can use Thinkorswim’s Premarket gap scanner to find gap & go setups. Take this advice, and use this tool and you will be able to find gap & go set ups without much hassle. Good luck and happy trading!

Polish your trading skills with thinkorswim. To learn more, click here.

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Using the AlphaTrends Anchored VWAP to Find Dynamic Support and Resistance

AlphaTrends Brian Shannon AVWAP Anchored VWAP

Stocks require liquidity or momentum to push them one way or another, creating the sort of outsized returns that traders are looking for. The momentum that will push prices lower or higher is driven by volume. While there are many different volume indicators, for example, on-balance volume or OBV, there is only a very small number that will combine volume and price to show you who is in control of the market at any given time. This is the volume-weighted average price, which is also referred to as VWAP.

AlphaTrends Anchored VWAP

If you are looking to take your trading to the next level, you may want to consider using the AlphaTrends anchored VWAP to find dynamic support & resistance. This is a popular indicator that both algorithmic and short-term traders use. While it may appear similar to a moving average, volume is factored into the equation with VWAP, ensuring there is improved insight into movements in the market. THE VWAP indicator tends to be drawn as a solo line on a daily or intraday chart. You can easily see example photographs of this if you take a look online. 

So, How do You Calculate VWAP?

Now that you know what VWAP is and why it is held in such high regard, we need to explain how to calculate it. The good news is that it is not too complicated! There are three key steps. 

  1. The first thing that you need to do is determine the typical price for each period. 
  2. You should then multiply the typical price by the volume. 
  3. The third part of the process is to keep a running total of the volume and total price by applying the formula: 
    1. cumulative TP * V / Cumulative volume. This will enable you to calculate the VWAP. 

This calculation will give you a volume-weighted average price for every data point, which you can overlay on the price chart to create an indicator or line.

How can you use VWAP?

There are actually a number of different ways that VWAP can be utilized. 

  • If you are a short-term trader, you may want to utilize VWAP to figure out if the price is oversold or overbought, as well as to evaluate the trade fills. Should a long trade be filled above the VWAP, it could indicate that the trader has gotten a subpar fill. 
  • Another way that we see VWAP being used is by institutional traders to move in and out of stocks with a minimal impact on price. For instance, you may decide to purchase below the VWAP and sell above it, ensuring the price is pushed back to an average, instead of being pushed away from it, therefore, maintaining a market that is orderly.

These are just two of many different ways that VWAP can be used. We hope that this has helped you to get a better understanding of VWAP and why it is so important for traders today. It can help you to take your trading to the next level.

Want to take your trading to the next level with VWAP? Click here to learn more.