If you’re anything like me, then I’m sure you’ve wondered what tools exist to alert you to an ideal setup each time it occurs. Also, like me, you probably believe you’re missing out on potential profits because life gets in the way of watching the charts all day. Well, hopefully this post will eliminate those thoughts.
Before I proceed, this isn’t an introduction to automated trading or bot trading or whatever other terminology exists to describe computers conducting our trading. I will say, in theory, I like the idea of taking human emotion out of the trading equation. However, in practice, my experience with the technology has been below par so let’s table that for another post.
Getting back to the business at hand, in today’s post I’m going to discuss how we can create a recurring alert on Thinkorswim. I’ve set thousands of alerts over the years but would much rather create one alert capable of thousands of opportunities. It would certainly save a great deal of mouse clicking as I constantly update my alerts, or forget to more aptly.
What Do I Want Thinkorswim to Alert me to
First, I must decide what I’m looking for. Is it a moving average crossover, price crossing below a certain level, oversold, overbought, etc. etc. For me, I’ve narrowed it down to an exponential moving average crossover that I want to see before ever placing a trade. Specifically, I want price to cross and close above or below the 9 EMA line. In my opinion, it is at this point I feel the most confident price will continue in the direction the cross occurred.
Going forward, I’ll describe the steps I took to create this recurring alert on Thinkorswim and hopefully you’ll uncover a few tricks that will help you create your own custom recurring alert as well.
Tell Thinkorswim “Exactly” What to Look for
Once I’ve identified what it is I’m looking for, now I need to get Thinkorswim to understand exactly what I want. Even a slight misstep in my instruction and the time was wasted. For example, when I originally set out to create the recurring alert I accidentally instructed Thinkorswim to offset the closing price to the future by one candle. Let me tell you, I was quickly let down as Thinkorswim alerted me non-stop to price movements that hadn’t even occurred. Kind of strange really, but you get the point.
Thinkscript Code for 9 EMA Crossover on a 1 Hour Chart
Here’s the code I used to create a cross above the 9 EMA on a 1 hour chart.
open("period" = AggregationPeriod.HOUR) from 1 bars ago is less than MovAvgExponential()."AvgExp" and close("period" = AggregationPeriod.HOUR) from 1 bars ago is greater than MovAvgExponential()."AvgExp" and open("period" = AggregationPeriod.HOUR) is greater than MovAvgExponential()."AvgExp"
Additionally, here’s the code I used to create the opposite cross below the 9 EMA on a 1 hour chart.
open("period" = AggregationPeriod.HOUR) from 1 bars ago is greater than MovAvgExponential()."AvgExp" and close("period" = AggregationPeriod.HOUR) from 1 bars ago is less than MovAvgExponential()."AvgExp" and open("period" = AggregationPeriod.HOUR) is less than MovAvgExponential()."AvgExp"
The Thinkscript code’s above would be entered on the create alert screen under the Price dropdown menu by selecting study, edit, and finally by clicking the Thinkscript editor tab at the top of the study alerts page. For more help entering the study via Thinkscript please view the video below.
Setting up the Alert without using Thinkscript
Most every alert I’ve created is without using Thinkscript and likely the same is true for you. First, navigate to the chart and right click whatever it is you’ll want Thinkorswim to create an alert for. Do this by right clicking that item and selecting create alert. In this instance, I’ll right click the 9 EMA line and select create alert.
Once inside the create alert pop up I’ll navigate to the price dropdown section shown below.
Inside the edit screen from the price dropdown shown above, select the following items.
Click the edit button from the above image to enter the following items.
Run through each section above to select your desired settings. You’ll notice in my case I included an alert offset of 1. This isn’t typical but Thinkorswim, for some reason, alerts at each cross of the moving average line rather than when price closes above it. Therefore, the offset instructs Thinkorswim to alert me to a cross above the 9 EMA once a new candle is painted and the previous candle has crossed above.
Alert Notification Settings
Finally, navigate back to the create alert screen and scroll to notify with.
If you haven’t yet done so, you’ll need to enter your phone number and e-mail address in the application settings found at the gear icon labeled “setup” at the top right of Thinkorswim. Then by clicking application settings and notification settings.
Create Alert Options
Alert for reverse crossover: Create silent alert
Lastly, and most importantly. Navigate further down to the options setting and select “Create Regular Alert”. This will instruct Thinkorswim to keep the alert active and send the notification every time price crosses above the 9 EMA, in this instance.
Click create and that’s a wrap. These are the exact steps I used to create a custom recurring alert on Thinkorswim.
In the steps above I’ve described how I went about creating a recurring alert on Thinkorswim. However, it would be foolish for me to believe that every time the crossover happens I must blindly take the trade. As I’m sure you’re aware trading is as much art as it is science. By creating this alert, we’ve effectively alerted ourselves to the science that’s currently happening. It’s our job to see if there is any masterpiece to be drawn.
Additionally, the steps above outline the creation of a cross above the 9 EMA line. I’ve also created a recurring alert for a cross below. As an options trader, and now possibly a futures trader, I want to be able to take advantage of whatever price movement is occurring. Just remember that for these alerts to hold any value they’ll have to be setup in a way that makes sense for the strategy you’re trading. Afterall, it wouldn’t make much sense to scalp the /MES futures by alerting from the weekly chart, etc.
In any case, I hope it helps someone out there. If more information is needed about alerts on Thinkorswim, here is a link to the Thinkorswim Learning Center.
Until the next post, God bless and take care,