V-Score Scans for ThinkOrSwim (Free Download)

Overview

In this tutorial I build 4 V-Score scans for ThinkOrSwim from our free VScore indicator. Each one finds stocks reverting to the mean, the volume weighted average price, from above or from below. Two are strict scans that also check the trend clouds and the CCI. The other two are wide scans that only check the V-Score.

Most of the work is cutting the indicator code down until the scan engine accepts it, and I make every change on camera. If you want to know what the V-Score measures first, start with the VScore indicator tutorial. This page is for traders who already use it and want ThinkOrSwim to find the pullbacks for them.

Key Takeaways

What the V-Score Scans Find

The V-Score scans look for reversion to the mean: stocks that traded above or below VWAP and are now heading back to it. The V-Score is the number of standard deviations between the close and VWAP. Our VScore indicator page covers how it's calculated and what the clouds mean.

The scans come in two strengths. The strict pair, which I call the signal scans, also requires a trend and a CCI reading. The wide pair casts a bigger net.

Because the code keeps the clouds, the signal scans can use the most recent trend to decide which pullbacks to look at: to the 0 line, the 1, the 2 and so on.

Why the Indicator Code Fails in a Scan

The VScore indicator code throws an error when you paste it into a custom scan filter, because it's too complex for the scan engine. A scan doesn't draw anything on a chart, so the drawing code can go:

• The alerts
• The painting strategy lines that style the plots and arrows
• The AddCloud line
• The AddLabel line

That leaves one error: "Exactly one plot expected." The indicator has a plot for the V-Score, each level line, the two 0.3 lines and both signals. A scan filter needs exactly one, so every plot except the signal you want becomes a def.

How to Build the Bullish Signal Scan

The bullish signal scan takes the full VScore code and 7 steps. Add the VScore indicator to a chart first. If you don't have it, our guide on how to import a study into ThinkOrSwim shows how to add the download.

1. Open the studies pane, edit the VScore study and copy all of its code.
2. In the Scan tab, choose Add study filter, scroll to the bottom and click Custom.
3. Click the second tab, thinkScript Editor, and paste the code.
4. Delete the alerts, the painting strategy lines, AddCloud and AddLabel.
5. Change every plot to def: the V-Score, the 0, 1, 2, 3, -1, -2 and -3 lines, the two 0.3 lines and BearSignal.
6. In BullSignal, change the -2 to 1 and Double.nan to 0, so it returns true or false.
7. Click OK, run the scan, and save it as its own scan query.

The finished signal line reads:

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It checks 4 things. The winning cloud is above 0, so the V-Score spent most of the lookback above the mean.

The V-Score is now 0.3 or below, close to the mean, and on the previous bar it was above 0, so price came from above. The CCI is above -100, so there isn't a ton of selling pressure. In the video the lookback was 120 bars. The indicator download defaults barsGoBack to 90, so change it to 120 to match the video.

To check the results, I opened Amazon on a daily chart. The V-Score had stayed above the mean, and a bullish arrow plotted on that day's bar.

How to Build the Bearish Signal Scan

The bearish signal scan is the same code with the two signals swapped. Click the edit icon on the scan, change BullSignal to def and BearSignal to plot, and change the 2 to 1 and Double.nan to 0.

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It checks that the winning cloud is below 0 and the V-Score was below 0 on the previous bar.

The CCI has to be below 100 at its default settings, so there isn't heavy buying pressure. Save it as a second scan query.

The bearish V-Score test in the indicator code reads 0.3 or above, so it needs the score to move from below 0 to 0.3 or higher. When I built the wide bearish scan later in the video, I set that test to -0.3 or above instead, to catch any move back within 0.3 below the mean. Make the same change here if you want the two scans to match.

When I ran the bearish signal scan, it returned no results. The market was down a little more than 2.5% that day, and a day like that is unlikely to offer pullback entries to go short.

The Wide Scans Without Trend or CCI Filters

The wide V-Score scans drop the cloud and CCI checks and keep only the reversion test. To build the bullish one, copy the BullSignal line into a new plot named signal, change BullSignal and BearSignal to def, and delete the cloud and CCI conditions. Written out from the video, the line reads:

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If the V-Score was above the mean and is now 0.3 or below, the scan returns true.

In the video it returned 47 results. Nike was one: the V-Score had been above 0 on the previous bar and pulled back to the mean, and the chart also showed a bullish arrow.

The wide bearish scan flips the test. I first forgot to change the 0.3, then set it to -0.3, because I care about shorting anywhere above that level. Written out from the video:

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It returned 3 results: EDIT, TZA and VXX.

On EDIT, the V-Score had been below the mean and had pulled back to it, sitting slightly above 0, at a point that would otherwise count as an entry.

Using the Price Label to Plan the Trade

The VScore price label shows the price at any standard deviation level, which most z-score indicators leave you to guess. Right-click the study on the chart, choose Edit study, and change the devStop input. Here's what the label showed in the video:

On Nike you might guess price was close to the mean. The label shows the exact price, so if a pullback to 0 is your condition to go long, you can have your order parked there ahead of time. On EDIT, the -1 and 1 labels gave the target and the stop before the trade.

How I Use the Scan Results

The V-Score scans build a watchlist of stocks pulling back toward their mean. Open each result on a chart, as I do with Amazon, Nike and EDIT in the video, and check that the clouds and arrows match what the scan says. Then use the price label to see the levels around price before deciding anything.

A scan hit is a read on a pullback, not an entry by itself. Set the stop and the target from the label first, and size the position so a stop-out costs a small, fixed share of your account. On a day like the 2.5% drop in the video, the strict bearish scan can come back empty.

Our upper VScore has its own one-line scan that calls the study by name, covered on the VScore indicator page. For another way to scan around VWAP, try our anchored VWAP scans.

How to Import the Ready-Made Scans

The V-Score scans download is a .txt file with 4 ThinkOrSwim shared links: Bull Signal and Bear Signal (more filter criteria), and Wide Bull Scan and Wide Bear Signal (less filter criteria). To load one:

1. In ThinkOrSwim, click Setup in the top right corner.
2. Choose Open shared item.
3. Paste in the link and save the scan.

The shared links are the original scans. The Code tab on this page shows the bullish signal scan rebuilt from the steps in the video, starting from the Lower VScore download, plus notes for the other 3. For the same custom filter steps on a simpler scan, see our increasing volume scans, and browse more on the scans page.

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