Thinkorswim Scan MACD RSI Squeeze

hi my name is Pete Hahn and thank you for watching this tutorial video be sure to visit ww1 for the full library of video tutorials I hope this video increases your knowledge and helps you become more efficient with this topic whether for home or work please support this channel by sharing these videos with your friends and colleagues hi guys today's video is prompted by a response that we received on our Facebook page this is our Facebook page for hon - tech LLC you can reach it by typing in your browser WWF facebook.com forward slash Han Tech and that is the direct link will take you to the Facebook page it's a good thing to get in to this page and go ahead and like the page that way you will be updated every time a new video is posted every video that I publish on YouTube I do post to this Facebook page so that you can be immediately made aware of any new videos that come out okay so the request came in to produce a scan based on the TTM squeeze as i've got here on the chart as well as the RSI and MACD histogram gentlemen said that he was struggling to combine these three into a scan and I thought well okay I can do that pretty quick now when I created this indicator and it says squeeze MACD RSI this bottom indicator with the blue line you see that small little spike right there what we'll do is we'll break that down I'll open it up you can look at the code if you need to see a step-by-step on how to combine the code for a MACD and an RSI into a single indicator then I'll link in the upper left-hand corner here for the next 30 seconds to the video I did previously and that video breaks it down step-by-step it shows you how to take the code from each of the indicators combine them into your own custom indicator and then modify it so that it produces these little zeros and ones 0 for false 1 for true so all you do is you build the formula so that it evaluates to either true or Falls and that is what the scanning tool is going to use if you need to see how to do that step-by-step it's in a previous video in this video however it's going to be more of a summary I'm going to show you how the indicator is built and then I'm going to show you how to combine the indicator with the squeeze into the scanning tool now before I go forward I want to show you that this spike here is per the gentleman's request he wanted to see when the MACD turned positive so what I'm using here is a 2 bar pivot low on the MACD and when the RSI was below 30 indicated by the line turning to a blue or cyan color so I coated it up that way and the code for the blue line at the bottom uses only the MACD and the RSI it ignores this squeeze because the source code for the squeeze is not available in thinkorswim platform and you would need to use the scanning tool to drop in the squeeze component of the scan and then you would use a second component for our modified indicator here that combines both the MACD and the RSI so as you can see every time that the indicator shows that there is a 2 bar pivot low and the MACD histogram as well as RSI over sold being below 30 we get a little spike here but look at what's going on with this TTM squeeze there are no red dots in sight now I'm not going to bore you to tears by cycling through every single chart that I've reviewed but I will scan through a few here and you can see here's three spikes there's no squeeze there's no squeeze and there's no squeeze on this one either for those of you not familiar with the TTM squeeze the squeeze is represented by red dots in the center line of the TTM squeeze indicator so this bar right here is in the squeeze this bar right here is in the squeeze this series of bars here is in the squeeze anything that's green is not in the squeeze so we'll scan through a few more here and I'll just point these out notice that these spikes often occur with a reversal in the TTM squeeze histogram the fact when you have the MACD turning positive and the RSI oversold is usually coinciding with a reversal in the histogram of the TTM squeeze not while the TTM squeeze is in force okay so you get the idea so trying to combine the TTM squeeze the red dots along with this indicator of the histogram turning positive on the MACD and the RSI being oversold below 30 they don't line up and this could be the problems gentlemen was having it may be why he struggled trying to produce signals with the scanning tool because the signals are removed by several bars if you can imagine look at this you've got the MACD reversal in the RSI oversold here and then you've got almost a dozen bars before you get a TTM squeeze I will show you one chart where I did find that the signal occurred while the TTM squeeze was in effect there it is right there of all the charts that I reviewed that's the only one I found where the TTM squeeze was in effect while the signal produced so regardless what I'll do is I'll show you how how the code was constructed and then I'll show you how to assemble all this together into a scan okay so before we go to the scanning page let's go to studies edit studies I will go ahead and click the scroll icon for the custom indicator that I have on the bottom of the chart displayed with the blue line and I'll show you the MACD component is here I just copied and pasted it straight out of the MACD indicator and thinkorswim and then we have the RSI component here so I've taken two indicators on the thinkorswim platform I've copied the source code and pasted it into this custom indicator the only thing that I've added are the three statements below highlighted here I created a two bar pivot MACD and this language is simply saying the current bar of the MACD is greater than the previous bar and the previous bar the MACD is greater than the bar before that and so all it's doing every time you see these numbers in the brackets it's going back in time so going all the way back five bars because the bar that we're on bar that we're evaluating is bar zero so we've got zero one two three four so that's five bars it takes the total of five bars to make up this signal and it consists of two consecutive lower bars and two consecutive higher bars and that is producing a two bar pivot low on the MACD let's see the other thing here we've got RSI oversold less than or equal to 30 and that's pretty simple straight forward and then what we do is we take the trend reversal is defined here this is actually the plot trend reversal and we plot the two bar pivot MACD and then what we do is we look back four bars essentially that's what this means we we're going to evaluate the highest value of this signal the oversold signal for the last four bars okay starting with the previous bar we don't include the current bar when we're evaluating highest in a previous series and this is simply looking at whether the value is greater than zero because zero is false one is true so all we want to know is has this signal been true in the past four bars all right because that way we want to give enough room in case the two bar pivot MACD low occurred you know sometime after the RSI was oversold a lot of times by the time you get a reversal on the MACD the RSI is come up above the 30 range and then you wouldn't be able to capture that whole signal together okay so now let's go to the scan page and I will show you how to put these together into a scan now if you want to reset this grab this button over here this round button appear and just select reset and remember it's not it's warning you you're going to lose any changes that you've made I'm not worried I've got this saved to my scan list and it populates the default startup settings so I'm going to remove these two and I'm going to change the first one to the last price I always like to do this with virtually all of my scans I like to define a limit to the current price of the underlying because that is the immediate that's the first filter and it helps to narrow things down the other thing I like to do is I like to add let's see it's an ADD study filter and then it's going to be a volume and it's going to be the average volume what I do is I just take the 10-day simple moving average of the volume and I say it needs to be greater than 500,000 and those two filters are usually how I begin every single scan because they sort of filter out a vast majority of the stuff that I'm not interested in we can look at all stocks and if we want to filter this down a little further we can say all optional why would you do that well maybe you're trading options some might say well I'm not trading options I want to see all stocks well if you stick with optional stocks one could make the argument that you're dealing with the stocks that tend to be more institutionally traded higher volume more popular more activity again that's not an investing advice that's just the reason why would someone choose that over something else and this is probably a good time for a disclaimer everything I'm displaying here is not to be construed as a recommendation to buy or sell any instrument or any fund of any kind no financial instruments are being represented here I'm merely trying to instruct you on how you can build a custom scan build custom indicators and use the tools that are provided by your broker all right that said let's move into the next step we're going to add another study filter and we're going to add licensed studies and we're going to add the TTM squeeze there are no parameters to be adjusted it simply tells you if the stock is in the squeeze or not we're going to leave both of these to daily and let's go ahead and hit the Scan button and see what kind of results we get ok great we get 21 stocks that are currently in a squeeze in other words they have a red dot let's see if we took Apple let me go back to our charts and type Apple for our stock then we would see on the final bar of the daily chart one red dot so that's what the scan is picking up the fact that there is at least one red dot to the far right of the chart so we've proven that we get results with the TTM squeeze scan great so let's add the rest of the code so that we can scan for our other component which is the MACD reversal and the RSI oversold let's go back to charts studies edit studies I'll hit the scroll icon for our custom indicator I will copy all of the code we don't need the first line I will right click and select copy press cancel twice go back to the scan and now that it's copied to the clipboard I will add another study filter and this one I will click the pencil icon and I'll go to the think script editor and I will highlight this so that we can delete that and then paste in the code and the last step is to change this to the word scan that's what the scanning engine recognizes as long as the one only one and only plot the plot that plots true or false values is called scan then it works ok so if you need the details for this again it's in the other video the one that I did it shows step-by-step how to build these yourself I encourage you to check that out if any of this stuff is not immediately familiar to you press ok to accept and now we've added that custom study in and our code will then be executed along with all the other filters so first we're going to filter by dollar amount then we're going to filter by volume then we're going to filter by skin squeeze scan and you can see we've only got 21 stocks that are currently in the squeeze now let's see if there are any stocks that are currently in the squeeze that also fit our criteria of a MACD pivot low and RSI over sold at less than 30 we'll press scan no matching symbols well maybe we've been too restrictive so let's open this up all stocks so now we're not filtering anything other than volume and price press scan again no matching results so you might be saying well it's not working the custom code isn't working but what you can do then is you can delete the squeeze scan and now all we've got are the price filter the volume filter and our custom code we'll press scan again and we can see we've got five results so let's go ahead and plot some of these a car and cern let's go look at our charts just to verify that it's giving the results we expected so we expect to see a little spike over here that the blue line spikes from a value of zero to one indicating a true condition and if you look at this we've got the tube our pivot low on the MACD and the RSI was oversold within the four bar period so we've got a true condition there and let's see we've got another stock to put in CER N and again we find our little spike here from 0 to 1 indicating we've got the MACD pivot low as well as RSI oversold let's see let's go back to our scan page and we've got a couple more punch in here CPA and FL diem in the last one TRC Oh all right same thing so we verified that the results of the scanner are correct and I believe what we're going to find is that if we scan this every day of the week for the next year you're not going to have very many signals if you combine the TTM squeeze with this particular indicator the MACD pivot low and the RSI s-- oversold by 30 it's just not going to show up very often at all now if that's what you want I showed you how to build it that's great but don't expect a lot of signals to show up it's a very very very rare occurrence and it's just because of the alignment of the two groups of indicators the TTM squeeze is occurring at different how we should we say different phase of the oscillator okay and that's really the main reason why they two don't line up very well so there it is hope it helps if you need help understanding how to do this in more detail again there's another video right now I'm going to link to you another video what I'm going to do is take this custom scan I'm going to remove the word squeeze from it so it's going to say scan MACD RSI I'm going to export it to a file I'm going to upload it to my Google Drive and then I will post that link in the description of the video so that you guys can download this custom indicator and install it on your thinkorswim platform so if you need to know how to install a custom indicator that you download let's say for my Google Drive then watch that video that I'm linking above thinkorswim display name of saved chart so that's all I need to show you for now hope it helps take care you for watching this tutorial video be sure to visit ww1 the full library of tutorials I hope this video increases your knowledge and helps you become more efficient with this topic whether for home or work please support this channel by sharing these videos with your friends and colleagues thanks and take care

Channel: Hahn-Tech, LLC

Views: 70,362

Rating: 4.9107141 out of 5

Keywords: Thinkorswim Scan MACD RSI Squeeze, MACD, RSI, TTM Squeeze, markets, trading, stocks, options, forex, futures, Thinkorswim (Business Operation), market scanner

Id: GgnF86FKBE0

Length: 18min 51sec (1131 seconds)

Published: Sun May 17 2015