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Best Indicators for Options Trading (Tradovate, ThinkorSwim, NinjaTrader, etc.) Setting up the right indicators can help you identify trends, volatility, and entry/exit points for options trading. Below are the most effective indicators for options traders, along with setup guides for platforms like Tradovate, ThinkorSwim (TOS), and TradingView.
🔹 Top 5 Indicators for Options Trading 1. Implied Volatility (IV) & IV Rank/IV Percentile Why? Options prices depend heavily on volatility. High IV = expensive premiums, Low IV = cheaper premiums.
Best for: Selling options (credit spreads, iron condors) when IV is high.
Platform Setup:
ThinkorSwim: Add ImpVolatility study or use the “IV Rank” and “IV Percentile” indicators (under Studies > Volatility).
TradingView: Use (IV) or custom scripts like “IV Rank/Percentile”.
2. Volume Profile + VWAP (Volume-Weighted Average Price) Why? Shows key support/resistance levels based on trading volume.
Best for: Identifying high-probability strike prices for selling options.
Platform Setup:
Tradovate/NinjaTrader: Add “Volume Profile” and “VWAP” from the indicator list.
ThinkorSwim: VolumeProfile and VWAP under Studies > Volume Studies.
3. Relative Strength Index (RSI) + MACD Why? Confirms overbought/oversold conditions before entering trades.
Best for: Timing long calls/puts and avoiding reversals.
Settings:
RSI (14-period, 70/30 levels)
MACD (12,26,9)
Platform Setup: Available on all platforms (default indicator).
4. Bollinger Bands (BB) + Keltner Channels Why? Measures volatility contraction/expansion (great for strangles/straddles).
Best for: Selling options when bands tighten (low volatility) before expansion.
Settings:
Bollinger Bands (20,2)
Keltner Channels (20,1.5-2.5 ATR multiplier)
Platform Setup: Available in TradingView, TOS, NinjaTrader.
5. Put/Call Ratio (PCR) & Open Interest (OI) Changes Why? Shows market sentiment (extreme PCR = potential reversal).
Best for: Contrarian options strategies (fading extremes).
Platform Setup:
ThinkorSwim: PutCallRatio (under Studies > Sentiment).
TradingView: Use PCR custom scripts.
🔧 How to Set Up These Indicators (Step-by-Step) For Tradovate (Web/Mobile) Open Chart → Click “Indicators” (top toolbar).
Search & add:
Volume Profile
VWAP
Bollinger Bands
RSI (14)
(For IV, use external tools like Tastyworks or Barchart.)
For ThinkorSwim (TOS) Charts → Studies → Add Study
Add:
ImpVolatility (IV)
VolumeProfile
PutCallRatio
BollingerBands
(Save as a template for quick loading.)
For TradingView Click “Indicators” → Search & add:
Volume Profile
VWAP
RSI
Bollinger Bands
For IV Rank, use Pine Scripts (search “IV Rank” in Community Scripts).
🎯 Best Indicator Combinations for Different Strategies Strategy Best Indicators Selling Premium IV Rank + Volume Profile + VWAP Directional Calls/Puts RSI + MACD + Bollinger Bands Straddles/Strangles Bollinger Bands + Keltner Channels Earnings Plays Put/Call Ratio + Open Interest Changes 💡 Pro Tips for Options Traders ✅ Use IV Rank > 50% → Good for selling options (high premium). ✅ RSI >70 (overbought) = Consider puts | RSI <30 (oversold) = Consider calls. ✅ Volume Profile POC (Point of Control) = Strong support/resistance.
Final Thoughts These indicators work best when combined (e.g., high IV + overbought RSI = potential put opportunity). Adjust based on your strategy (scalping, swing trading, selling premium).
Need help setting up a specific platform? Let me know which one (Tradovate, TOS, NinjaTrader, etc.), and I’ll guide you step-by-step! 🚀