Last updated: September 28, 2022

Thinkorswim Bull Flag Scanner

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Thinkorswim Bull Flag Scanner

The Bull Flag Scanner on Thinkorswim can be extremely useful for traders using the platform. If you are looking for one on Thinkorswim there are a few options available.

The Bull Flag Scanner on Thinkorswim Option 1: Free Script

Back in August 2019 Ken Rose of TDAmeritrade tweeted that he had added a script that adds an extra column to your Thinkorswim screen that can be used for both bull flags and bear flags.  


This set off a lot of discussion and modification on the thinkscript forum. Users reported that the script did not repaint on all devices, you need to check.  It can be combined with other indicators such as StochRSI to indicate when a stock is oversold or overbought.

Thinkorswim Bull Flag Scanner- Scanner Custome Filter
Thinkorswim Bull Flag Scanner- Scanner script

The script can also be used with other indicators such as Bollinger bands. Most users agree that using it on a daily time frame gives the best results.

However you can set whatever timeframe you want by going to edit script, at the top of the box you will see timeframe, click on the letter “D” and you can change the time frame.

In November 2019 Ken updated his script.  There is ongoing discussion over whether Ken’s code can be called a flag pattern. It seems that he didn’t use the popular fractal energy computation which is used in bull flag scanners. This computation is commonly called the Mobius implementation, which you can find here. Mobius is a user well known in the Thinkorswim script community.

If you can’t get the watchlist to work on thinkorswim then make sure you go into your watchlist and click the little gear that says customize. Type in the name of your watchlist and  it will appear, double click it and it will be put in your watchlist. You can read more about creating a custom watchlist here

Unfortunately as of July 2022 it appears that this code does not work on Apple Macs and most users agree that the code in post #1 is the best version.

The Bull Flag Scanner on Thinkorswim Option 2: Patternsmart

Patternsmart is offering a Bullish Flag chart pattern indicator with alert, and scan for Thinkorswim TOS for a discount price of $249 from $299 at the time of writing. 

There are no reviews on the product page, and the indicator is only for the Bullish Flag chart pattern indicator. The scanner itself makes sense and paired with the indicator alert makes for an easy solution for investors looking to get a failsafe scanner.

Just to recap, the bull flag is in the form of a tilted rectangle. The flag formation has a double edge, with two lines showing the support and resistance level. These lines tilt downwards gently. The tilt can go on between as less as three to as many as fifteen trading periods. The flag always ends up looking like a down-slanted rectangle.

Once the price action starts to move up again, the lines usually move upwards for approximately the same distance as they moved before to the bull flag formation. Having a scanner in place to pick out this pattern makes it easier to plan strategies.

The scanner can be built to pick up on the trend with varying sensitivity (more on this below). The results can vary according to your preference for trading lengths that you want to pick up and the strategy you wish to adopt. The scanner can be built according to your trading requirements.

The display settings can also be modified to display colors according to your preference.

The Bull Flag Scanner on Thinkorswim Option 2 Patternsmart

The Bull Flag Scanner on Thinkorswim Option 2 Patternsmart


Designing The Bull Flag Scanner for Thinkorswim

The Bull Flag Scanner can be designed to apply to most forms of flag parts (the pole and flag) regardless of their duration. The scanner parameters can be customized according to traders’ individual choices. The scanner below is designed according to default values.

Thinkorswim Bull Flag Scanner- Designing of scanner according to default values

The scanner applies on all timeframes. Alerts can be generated once the price goes across the resistance line or falls under the support line. In the case of a crossover, a wedge appears over or under the current line. 

The scanner is designed to detect bullish patterns on four swing points, two swing highs and two swing lows. To customize the sensitivity of the pattern to match your trading style, the value of “Input Strength” can be changed.

The “Input Strength” specifies the bars on both sides of the swing highs and lows. 

Thinkorswim Bull Flag Scanner- Scanner Parameters

On setting Input Strength at 5, the high point will be the highest in five bars from the right and left (a total of 10 bars). This will be true for the low points too. This means that in Fig. 1, points A, B, C, and D are the highest and lowest in at least five bars on each side. 

The strength settings can be increased and lowered to customize the scanner for your trading preference. The bigger the level of strength you pick, the bigger a pattern you will get. The scanner also allows the trend lines to be customized to highlight the specific pattern.   

Remember to use the same Input Strength levels for both the scanner and the indicator. If there is a mismatch between the strength settings, no pattern will be displayed.

For example, if your scanner is set at the strength of 7 and the indicator is set at 5, the scan results will probably not load properly. The scan will not display any findings. 

Using The Bull Flag Scanner on Thinkorswim

This scanner should help you identify Bullish Flag chart patterns on the Thinkorswim terminals. In addition, it will draw trend lines for the Bull Flag when the trend emerges.

Thinkorswim Bull Flag Scanner-Bull Flag Trend Lines

The top line (known as resistance) is formed by at least two dips plotted by descending peaks. The bottom line is formed by at least two or more descending troughs.

These lines will work as the boundary of expected peaks and troughs until any outlier pattern occurs. These outliers, known as breakouts, are continuation patterns, meaning those in upward trends will move upwards, and those in declining trends will move downward. 

Flag performance is usually linked to the initial price movement that initiated the flagpole. If there is a greater than 90% change, there is a strength in the directional trend. Volume is higher at the base of the flagpole and falls at the top of it. 

How the Scan Helps

Thinkorswim Bull FLag Scanner- How the scan help

The bull flag played out in Fig. 3 is a classic scenario. This does not always happen as trends are notorious for breaking off unexpectedly. In the chart, you can see prices move to a max of $21 before retracting. The breakout from the bullish patterns occurs at $15. The scanners target price was $15 + $6 = $21.  

Conclusion

The free script in option 1 has some issues with its implementation, but if done right, it can yield good results for users that have successfully implemented it and it's free. 

The Patternsmart scanner will cost you $249 and will also have some issues for people not too familiar with the scanners and implementing them. 

At the end of the day, the decision lies with the user themselves. 

However, it is important to remember that while chart patterns are indicators of probably outcomes, they are not predictors or forecasts of events to come. The best designed of scanners can fail because the markets never follow the rules exactly. There is no set pattern or formula for trading successfully. 

Patterns can bend unexpectedly, twist and turn without warning, making the trading process uncertain. This can occur to the level of the opposite of the expected occurring and all precaution getting flipped. 

You might be also interested in Bollinger Band Squeeze Scan on Thinkorswim and Thinkorswim Memory Usage Settings.


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