Add Label Function

ThinkOrSwim Labels Part 1: Static Labels

Let's get started by opening our thinkScript editor in ThinkOrSwim, and start writing some code.

To create your first study, you can click the studies icon, and then click "Create" to open up a blank slate.

Let's take a look at the AddLabel function before we write any code. If you don't see it yet, open the reference window in the top right corner. Open up the functions tab and then, inside of the functions tab, look for Look and Feel.

The AddLabel function takes three different parameters:

1. The first parameter is a boolean variable that determines when you want this label to plot
2. The second parameter is the text you'd like to plot inside of the label - this can be text, integers, EMAs, or even a dynamic condition
3. The third parameter is the background color that you'd like for your label

One key thing to note is that all 3 of these parameters can be either a static value (ie. always yellow, as an example), or can be smarter, with if/else statements, allowing you to incorporate logic into your labels.

You'll see how this comes into play in the dynamic label section of this tutorial.

Example 1: Plotting the 8-Period Exponential Moving Average inside of a label

Let's can start by defining the 8-EMA:

def EMA8 = ExpAverage(close, 8);

This is a typical method of creating an ema, and you'll now notice the first error that ThinkOrSwim gives you: at least one plot should be specified.

Note: An AddLabel is considered to be a "plot" variable, and will eliminate this error.

Now we can bring together our EMA8 variable inside of the AddLabel code, in order to create a label that outputs the value of the 8-period exponential moving average.

AddLabel(yes, EMA8, color.yellow);

If we compare the label's output with the normal EMA line, you'll see that the two line up, as we would expect.

And just like that, we have written our very first label.

Now let's move to our second example.

Example 2: Plotting the Volume inside of a label

The second label we will create is around volume, so picture how you might go about doing this. You would simply change the EMA to volume instead of defining it as a separate function.

AddLabel(yes, volume, color.yellow);

By default, anything that references volume will be placed in the volume channel, which you can manually shift up in your studies pane, to plot the label on your charts.

Example 3: Plotting the Chaikin Money Flow inside of a label

Before creating the Chaikin Money Flow label, it's helpful to review the indicator, along with the built-in plots that ThinkOrSwim provides.

There are 2 plots inside of the Chaikin Money Flow indicator, and the "CMF" value is the one we (and most folks care about). Using that plot variable, we can output the label, referencing the CMF as the number we'd like to see in our label:

AddLabel(yes, ChaikinMoneyFlow().CMF, color.yellow);

Now as soon as we do that and I click apply, the label changes. The label is now 0.007, and if we compare it to the Chaikin Money Flow indicator's value, you'll see the two values line up.

To summarize, the AddLabel function has three distinct inputs. The first parameter is when you want this variable plotted; the second is what you want plotted; and the third is what color would you want the background to be.

Now let's move on to a bit more of the challenging the more interesting type of labels which are the dynamic ones.

ThinkOrSwim Labels Part 2: Dynamic Labels

Example 1: Plotting Stacked Moving Averages inside of a label

Let's start with the clean slate here.

The first thing we'll want to do is establish a dynamic label for our stacked moving averages, and to do so, we need to define the EMAs that we wish to measure, along with checking if they're stacked bullishly or bearishly (or neither).

Let's start with defining our exponential moving averages:

def EMA8 = ExpAverage(close,8);
def EMA21 = ExpAverage(close,21);
def EMA34 = ExpAverage(close,34);

We now need our next set of variables, which will tell us if they're stacked bullishly or bearishly.

def bullishStacked = EMA8 > EMA21 and EMA21 > EMA34;
def bearishStacked = EMA8 < EMA21 and EMA21 < EMA34;

We now need to set up our plot variable, which will be the AddLabel, so let's get started.

When do we want this label to appear?

Since we'd always want to check if it's true or not, I'll keep using yes as the default, but you can change that, if you're looking to have a conditional label in ThinkOrSwim.

This next parameter will be a little different (read: more sophisticated) from what we have done before.

• If the EMAs are stacked bullishly, we want the text "Bullish" to appear on our label
• If the EMAs are stacked bearishly, we want the text "Bearish" to appear on our label

We could start with something simple like having the label always be yellow, but I believe it would be a lot more interesting if the color changed depending on whether we were bullish or bearish for our third parameter.

AddLabel(yes, if bullishStacked then "Bullish" else if bearishStacked then "Bearish" else "N/A", if bullishStacked then color.green else if bearishStacked then color.red else color.yellow);

Now as soon as I do that and click apply, we get a label like this, on a bullish chart (AAPL):

And something like this, on a bearish chart (AT&T):

Example 2: Plotting the Total Count of Bullish and Bearish Signals Inside of a label

The next label we'll create is around a counter variable.

For this portion, we are going to use the Simple Breakout Tool indicator as our starting point. This is a free indicator that we built in our "How to thinkScript" tutorial series, which is available here for download.

We need to establish a brand-new variable that will keep track of how many times bullish and bearish have occurred on this chart, just as we did previously with the previous variables.

To create the counter, we're going to use the TotalSum() function, which goes all the way back to the beginning of the chart and data available, to start tallying the count (ie. in this case, a 5 year, daily time frame chart).

def sumOfBullish = TotalSum(bullish);
def sumOfBearish = TotalSum(bearish);

And once we have both of those variables defined, we can now plug them into our AddLabel() code, so ThinkOrSwim can output the counter values.

AddLabel(sumOfBullish >= 1, "Bullish: " + sumOfBullish, color.green);
AddLabel(sumOfBearish >= 1, "Bearish: " + sumOfBearish, color.red);

And a third example of incorporating the same data, but using more conditional statements for a "smarter" ThinkOrswim label.

AddLabel(yes, "Bullish: " + sumOfBullish + " | Bearish: " + sumOfBearish, if SumOfBullish > sumOfBearish then color.green else color.red);

Here's what the final output looks like, counting the bullish and bearish Simple Breakout Tool signals on a chart of the S&P 500:

This second dynamic label example should give you a starting point for how to begin collecting data from the indicators we've created, such as the Fisher Transformer indicator and scans, and expedite your research and analysis process.

Example 3: Connect User Input to Label Output

For our third and final label, we're going to keep it interesting by connecting a user's input on the studies menu, with the output shown in the label.

We'll use the EMA length as an example, but you can extrapolate this for a multitude of use-cases, including things such as displaying the number of days until earnings, backtester stats, etc.

Let's say we wanted to plot what the fast simple moving average (SMA) length is that's currently being used in the calculation for the Simple Breakout Tool.

We can simple paste in the user input variable for Fast SMA length into the second parameter of the AddLabel function. This allows for us to (very) easily connect the two, and cycle through charts, watchlists, etc. with easy statistics:

AddLabel(yes, "Fast SMA: " + fastSMALength, color.yellow);

They're also excellent for testing out ideas and finding out how they perform during back-testing. We've proved this with the Slingshot Squeeze Back Tester, which tests slingshot squeezes, as well as the Squeeze Signals Back Tester.

Here's an example of labels expediting the research process in the stock JCI:

Conclusion:

In a tiny nutshell, the labels are what I believe make the most of these statistics. They're beginning to employ them to really gather data and improve the speed of testing your training plan.

I hope this tutorial around how to create a label was useful. We went through six different examples, some were a bit shorter, some were a bit lengthier in terms of the explanations, but hopefully all around here you have a good starting point to take the add label function and use the three different parameters and start to test it in your own indicators.

Feel free to email us at [email protected], if you have any questions.

Alright, take care everyone. Good luck trading and we'll see you in the next update.