Thinkorswim MTF MACD Indicator

hi my name is Pete Hahn and thank you for watching this tutorial video be sure to visit www.personalfitnesstrainerstlouis.com a fewer one of our viewers posted a comment to the Facebook page for hon Tec LLC and in correspondence with that viewer I found out that what they were really looking for is something to take them MACD indicator and use it to give them a short term trend indication a medium term trend indication and a long-term trend indication and I ended up introducing this viewer to a new concept to them you may have already heard of this it's called multi timeframe analysis although I'm not a professional trader I have studied under several and one thing I found in common the ones who demonstrate that they can consistently earn money in the markets all had the same thing in common they all use multiple timeframes to set up their trade to get the direction from one timeframe and they get their setup from another timeframe and maybe a third timeframe might be thrown in there as a filter in fact some will even use up to four or five time frames to develop their trend analysis and set up their trades so this indicator is a MACD indicator that takes advantage of three time frames the base time frame is the time frame on the chart as you can see here an hourly time frame for this chart two one-hour bars and you see here an indication with the little green label time frames are correct if that turns red and it says time frames are wrong it means you have selected incorrect time frames for your medium and long-term trends when we get into show you the settings you'll see exactly how that's set up and I'll show you examples of how to do it wrong and examples of how to do it right so as you can see in the currently displayed chart we have histogram as a standard MACD histogram you can see the chart MTF MACD and then below that as a standard MACD it's been slightly modified just coloring the bars that's the only modifications for that you got a bright red moving to dark red as it goes higher and then you've got a light green moving to dark green as it starts to move lower right that's the only modification to this MACD at all so you can see between the two they plot exactly the same so the histogram and the two lines are plotting from the currently assigned time frame on the chart which again is one hour got it okay now let's talk about these histogram colors you see gray and you see green and way over here to the right you see a single red bar I'm going to explain those that you understand how those are being colored I'll explain logic so that you understand so we have three different colors in the histogram as I said we have gray bars which are neutral they have green bars which are trending up and we have red bars which are trending down okay now a bar can be colored green only if the base timeframe which in this case is one hour as well as the two higher time frames that you've selected for this indicator are also trending higher so all three time frames must be in agreement before you can get a color other than gray gray simply means that of the three time frames one or more are not in agreement or are in fact contradictory to the others so when you see a green or red what it's telling you is the MACD indicator values for all three time frames are lined up in the same direction right sort of like getting the stars lined up and that's all there really is to it the code was quite an ordeal to create it took me about six and a half hours and I wanted to make sure I did a really good job of developing it so that you have plenty of parameters plenty of freedom to adjust it to use it as you see fit so before we get into examining the parameters and how you can adjust this indicator for your own charts I want to run through a few of the charts I've selected one two three four I've selected four stocks so I want to examine with you and just show you what the indicator looks like on the chart like I said be sure to stick around the link is going to be posted inside the video you're not going to miss it as long as you you know watch it all the way through the explanation of how to use the indicator how to adjust it on your platform it'll be up for 30 seconds you'll be able to click on it it will take you to another page where you can download this indicator to your thinkorswim platform okay so in this case you can see that the three time frames were all lined up in the positive direction except for one bar here somebody fell off line and so then we had continuation with the with the histogram higher so let me scroll the chart to the right a little bit and you can see that over here we had several places where all three time frame were lined up in the same direction and they happen to be in the down direction and they bars are turning red okay it'll scroll this a little bit further to the right and you can see another location where all three timeframes of the bars began to trend in the same direction upward and you have the green bars so we have gray that means that you don't have all three time frames and alignment all right so you only have all three time frames and alignment when you have red or green I'm repeating myself but it's on purpose okay so we'll scroll this all the way to the right and then we'll minimize this behind the scenes here this screen is full size right now it's maximized I'm gonna double click up here in this blue bar and it's going to bring us back to the regular setup that I have and this has all three time frames that I'm using for this indicator shown right here on the chart on the left side we have the weekly time frame in the middle is the daily time frame and hourly time frame that we were just viewing in full screen is shown here all the way to the right what I want to do is I want to click on few of these stocks here and then I want to show you exactly how that all lines up and so you can see it so I'm going to scroll this middle one a little bit to the left so we catch this little peak here and you see how my cursor is lined up you see the weekly and the daily chart the cursor is synced between the two charts wherever I place it on the middle chart the weekly chart cursor the vertical line there that you see follows along with it now if you don't know how to set that I want to show you real quick and then we'll move on okay so to get your cursor to sync between your charts simply click the style button and from style select settings and it's right here on the very first tab general you go down to the bottom section where it says synchronize you can synchronize drawings or you can synchronize crosshair position you just check that box and hit apply and okay and then you should see that your cursor is sync between your multiple charts okay so let's scroll this hourly chart to the left and see if we can get it caught up with the others because I want you to see how the three different timeframes come together to make this indicator do what it does all right this should make it pretty clear now you can see I've with the synchronized cursor the vertical line on all three time frames they get the weekly on the left the daily in the middle and the hourly on the right you can see that as we move into this first red bar in the histogram you can see that we've got all three time frames in agreement we have a lower bar on the weekly and we have a lower bar on the daily and we have a lower bar on the base time frame which is the hourly and that is when all three time frames are lined up together that the multiple time frame MACD indicator is able to paint a bar rut red or green in this case red okay so let's zoom all these back to the right and if you don't have that down just yeah just want to show you another stock here and so you've got a few examples to go by let's scroll this over and see where we get I'm just gonna zoom this across here so you can see if you're following the cursor on all three time frames then I'm just going to move my cursor along here as you see this little this little dip in the middle here that I'm indicating this little basing out kind of period and so what do you get on the multi time frame MACD histogram you got nothing but graze here you had a few reds and it's gray gray gray you get some more reds here you know get any greens throughout this whole little basing out period here and then let's see we cope there's our first little spot of green so we get a little bit of green here another green spot here and then and so you can see that it's merely picking out the fact that all three time frames are in alignment there's no magic here there's no pixie dust it's it's no Holy Grail it's just multiple time frame alignment that's all it is okay so I'll show you one more chart let's see this one's Facebook and I'm just I'm just picking these at random I'm just looking at charts trying to find good examples I'm not trying to tell you that one's good to buy or not you know just like I said I'm not trading on writing code see we'll scroll through here and let's look at that okay so on the okay so you see the weekly in the daily and you see we're in a bunch of red here and then we start to get a little bit of green and scroll this to the right a little bit more we don't get any red it's all green it's all green you know it's either gray or green and so you can see kind of how how this indicator looks and how the time frames line up okay so all right so now that you've seen the charts and you understand how it's using the three different time frames now I can get into the parameters of this indicator and show you how to make the adjustments to set it up the way you want let's say you don't want a weekly a daily and an hourly let's say you want to use an hourly a 15-minute and a five-minute I'm gonna show you how to do that and after that I will post the links that you can download this indicator to your own thinkorswim platform alright we'll jump right into it and I will double click on this little blue section of the title bar and that will maximize the screen okay now it's a full screen here it'll be a lot easier for me to show you how to modify the parameters of this study let's go to edit studies and then let's go ahead and click on the gear icon alright so you can see these first two parameters the midterm period and the long-term period these are currently set to daily and weekly you can see the list that I've got available here it's a fixed list there's nothing in between for instance a three minute and a five-minute you can't go from five to ten you have to go from five to fifteen it's just the way it is I apologize if that irritates you but I tried to provide as many options as we're reasonable next you have the fast and slow length and the MACD length this is just standard settings 12 26 9 and as you scroll down you can see that you can change the fast the slow and the MACD length for also for the midterm as well as the long term ok so make sure you understand we got 12 26 9 those parameters appear for each of the timeframes that are referenced so it is possible with this indicator you can set your base timeframe MACD to 1 setting let's say you've got a favorite setting that's not the standard 12 26 9 well then you can go to your middle timeframe and you can make it different you can make it totally different if you want and so the parameters are there next I'll show you the plots you've got the standard three plots that are available on every MACD which is the value the average and the diff the diff becomes the histogram those are standard and they're all set to show plot as default in addition to the zero line which is plotted by default there are another two plots that are available that you can turn on if you want to see what the indicator is doing behind the scenes you have the mid-term diff and you have the long-term diff these two plots are the medium-term and long-term MACD histogram and you can plot those on your chart simply by selecting the tab and then clicking the show plot button so I've just turned on the midterm diff well hit OK and we'll hit apply and ok and now you can see this line here you see it changed from blue to red and you can see that it takes big steps well the steps encompass an entire day why because the midterm trend is set to daily so every day is going to be a new step in this plot let's go back to studies edit studies press the gear icon now I'll go to the long-term trend diff and I'll click the show plot to turn that on hit OK and apply and ok and now you can see that this other line doesn't take a step but every 5 days so you got one day here 2 3 4 5 days before it takes a step from one level to another ok you can see that on either side of this so this line here is based on the third time frame which is your weekly time frame it's currently set to weekly ok so you can turn those on if you need to see what's going on behind the scenes I'm going to go into edit studies I'm going to press the gear icon and I'm going to turn those two off I don't believe that they're really needed during the use of this indicator because after all this is the purpose of the indicator to clear everything up for you so that you don't have to look at three different time frames it's all right here on one chart I want to show you one more thing and then I will post a link and give you guys an opportunity to download this indicator to your platform oh I almost forgot guys this is really really important there is an option on thinkorswim platform for selecting how the aggregation periods are started you can set them to start at market open or you can set them to use natural hours and so I'm going to show you step by step here how to make sure that your platform is set up correctly so we'll go to studies click Edit studies I'll click the gear icon for now I'm going to turn on the plot for the mid and long term indicators so that you can see them see that this blue line here that turns red it's solid now you go to style settings and it's going to be in the equities tab you can move this out of the way a little bit so you can see their lines here it is down at the bottom start aggregation at market open I'm going to check this now and look what happens to the chart once I applying okay you see that gap there that gap is no good for this indicator okay so that option needs to be unchecked for any instrument you're trading I'll show it to you again we'll go to style go to settings go to the equities tab and find the bottom option they're called start aggregations that mark it open and uncheck that box if it's checked it will make this indicator well it won't be accurate quite honestly and it's also an option available in the options and futures tab so whether you're charting this indicator with equities options or futures make sure start aggregations at market open is unchecked that's just part of the thinkorswim platform with that box checked it disconnects it from the higher time frames there's really very little I can do about it and that last thing I wanted to show you is how you can adjust the time frames if I change this time frame to match the midterm time frame that's currently assigned to the study you'll see that you get an indication here that the time frames are wrong if you see red here and it says the time frames are wrong you've got something adjusted incorrectly so let's take a look at this we're go to studies edit studies press the gear icon okay and so I want to show you you have the midterm and the long term the midterm is set to daily that means your base time frame the time frame the indicator is placed on cannot be the same as the midterm or the long-term time frame it has to be lower so in this case the base time frame has to be something lower than daily now if we wanted to change the long term to monthly and when order to change the midterm to weekly we can press ok apply and ok and we can see now we get an indication that the timeframes are correct now let's take this down to maybe a 5 minute what's happening is the five minute is the base timeframe but it's still looking at a weekly in a monthly timeframe to get the alignment so let's go to edit studies press the gear icon let's change the midterm to the next time frame up which is 15 minutes and let's change the long term to let's select an hourly so click OK apply and ok and we can see that the timeframes are correct and histogram colors have been modified so that they show the correct alignment of the time frames ok so that's what I want to show you guys it's very important that you understand that last little piece that I covered and that's why I waited till now to post the link so that you can download this indicator because if you don't understand how to stack those time frames for the base the midterm in the long term if you don't understand how to stack those correctly you're gonna get frustrated and you're gonna say it doesn't work and you're gonna say it's broken so you got to make sure that you stack those time frames correctly long term is the highest time frame midterm is something less than that and then the base time frame has to be less than either of those two so you either go starting from the from the highest time frame long-term hourly midterm 15-minute base time frame 5-minute that's how you stack them okay so you've got the link in the upper left-hand corner and that link will direct you to a download page on the Han Tech website that will enable you to download the indicator from the Google Drive now if you're not sure if you haven't seen any of my videos and you're not sure how to take that file and install it on you think of swim platform I'll go ahead and link another video this one in the upper right and that is called display name of Saved chart it's in that video that I described how to install indicator from a file that you save to your desktop whether somebody sends it to you or you download it from some other location so I've left those links up there for plenty of time here for you to go ahead and get those and I hope that this indicator helps you become more efficient and effective at what you do I hope it gives you inspiration and ideas for more ways that you can customize the thinkorswim platform to make your chart time quality chart time thanks for watching everyone take care thank you for watching this tutorial video be sure to visit www.meliar.com/mpanel.htm

Channel: Hahn-Tech, LLC

Views: 33,477

Rating: 4.9029126 out of 5

Keywords: Thinkorswim MTF MACD Indicator, Multi Time Frame Analysis, Stocks, Options, Futures, Forex, Markets, Trading, TD Ameritrade, Thinkorswim (Business Operation)

Id: IkVJY8a1JoY

Length: 22min 48sec (1368 seconds)

Published: Sun Jul 26 2015