Forex Trading Online

Trading Forex online can at first be a daunting task. This is true for anyone seeking to get into any type of trading vehicle. Like all trading vehicles, Forex comes with it's own lingo, and nuances that must be learned first in order to help ease into the massive learning curve.

Here is some Forex terminology that you need to understand before getting any further:

• Pip: A Pip is the smallest price movement in regards to all currencies being traded. Most of the currencies that are traded have 5 digits.
• Pair: Forex currencies are always traded in pairs. Meaning they are traded against each other.
• Base Currency: Is the first currency considered in the pair.
• Counter Currency: Is the second currency being traded against the base.

Because the Forex market is relatively easy to get started with, many first time traders tend to just want to jump in with little to no knowledge other than the basics. This is why most traders fail when first starting out. There is a balance that a trader needs to establish between knowledge and practical application that needs to take place before someone can become successful. This is why learning a proven Forex strategy, and having continual education is a must.

Forex Trading Strategies

There are many Forex trading strategies that work, and work well. If you're shopping around for a strategy that works it's important to keep these things in mind when searching for one that works:

• A Proven Record: Make sure that whatever the strategy you choose, that it has a proven track record. This means the the owner of the strategy is providing real trading results. This includes success and failure rates along with being able to provide testimonials from multiple people who have learned to trade their strategy successfully.
• Community Support: Just buying into a Forex trading strategy is half the battle. Learning how to implement it properly is the other half, and the most important part. Being able to be a part of a community of traders (no matter how small, or big) can make the difference between success or failure. Make sure that the strategy you buy into has some type of support system set up to help you with analyzing your trades, and the trades of others. Much can be learned this way, and can help anyone catapult them through the trading learning curve.
• Updates: The Forex market is a living market. Meaning it can and does change from day to day, and year to year. This means that strategies that were viable a year ago, may not be viable today. Being able to adapt, and update your strategy to the current market is a must. While there are certain aspects to trading that don't change, there is never any guarantee that a given strategy will work forever. Be mindful of this, and make sure to always be adaptable to the markets.

Forex Trading Courses

Since education is vital to success it should never be avoided. Forex trading courses are something every Forex trader should be continually participating in. It's important to keep in mind that every trading course is not equal though, and there are some vetting criteria to keep in mind:

• They Actually Trade: There are a lot of educators today that talk the talk, but don't walk it. This should throw up a big red flag. Not only do these educators have little to offer, they can drastically put your account into the red when their "advice" is blindly heeded. Find an educator that has practical knowledge of the markets. This means they that have garnered years of wisdom by putting their knowledge to the ultimate test, and have the most wisdom to impart.
• 1-on-1 Coaching: Live 1-on-1 coaching is extremely helpful. It allows the expert to be able to assess the habits, and level of knowledge that the student has. It also allows the student to be able to increase their odd of improving by leaps and bounds. This option isn't cheap, but it sure is an effective way to bolster the traders confidence, and success rate.
• Live Coaching Calls: Traders can benefit immensely from live coaching calls. This is a forum where traders of every skill level can ask questions, and get answers from not only each other, but from the experts their learning from. Look for at least weekly live coaching calls when looking for an educator.
• Interested In Your Success: If you've ever tried learning from someone not interested in your success, then you most likely had a very stale, one sided experience. There are many such Forex trading courses available, and they are not always easy to spot. If you ever find yourself in one, get out ASAP. They will only be a drain on your bank account, and time.

Trading Forex Online Works

While learning to trade Forex, or any other vehicle successfully is demanding, grueling, and a long process. It is extremely rewarding, and offers a lifestyle like no other career choice. It is very possible to succeed, but it could take years before you hit your stride.

If you're serious about learning how to trade Forex, but don't want to put up your own money. Click the button below to learn how you can trade someone else's money to get started!

Want to learn more about Forex trading online before jumping in? Click here for an excellent Forex trading resource.

How to Trade for Success: 3 Unique Ways to Increase Your Probability of Profit

In the wonderful world of trading (and any business for that matter), profits are king. If you're not taking in consistent profits, then you're not doing your job as a trader. It's a simple business model, but it lies at the heart of every successful enterprise; Keep profits up by placing trades that give you a high probability of success. The only problem is; how do you know the trades your taking have a high probability of winning? Well, that's why I'm here. I'm going to give you some easy to follow guidelines that will help you achieve that goal.

Before I delve in. I want to pose a few questions that you should be thinking about as you read on: What do you define as high probability? How do you spot, and place trades with a high probability of success? How do you define consistent profits?

Okay, lets begin.

1. Recognize that limited profit trades have a higher probability of success than unlimited profit trades.

As a trader just getting started out, I learned about the difference between limited profit trades, and unlimited profit trades. When thinking about these types of trades, it is important to distinguish that we are speaking in regards to profit potential, and not what could actually happen. I mean really think about it, there is no trade where you will have an unlimited upside, and leave on forever. It's all about the potential though, and that's what threw me for a loop when I first started trading options. I figured that limiting my potential profit was probably the stupidest thing I could do, and wanted to only learn the trades that gave me an unlimited upside in terms of profit potential.

The problem with this thinking is that the trades that offer the tasty unlimited potential temptation, carry the most amount of risk. High risk equals high reward right? Well that may be very attractive in theory, but every successful trader out there knows that in order to make it, they must limit their risk as much as possible while still maintaining a decent profit curve. Doing so allows the trader to stay in the game, and increase their odds by giving themselves enough chances for the numbers to play out (see # 2). Remember, high risk may equal high reward, but it also lowers your probability of success by putting your capital at risk. The longer you can keep making trades, the better your odds of success will be.

All trades that limit your profit potential also limit your risk, which naturally places you in a position to increase the odds in your favor. So in essence, these trades do your job pretty much for you. You just have to know when to place them, and how to manage them once they become profitable. If you stick to proper risk management rules (read Howto Manage Risk) then you'll only ever have to worry about managing your winners, and you'll be able to stop stressing over your losing trades, and thus increase your probability of success.

2. Know the percentage chance that your trade will be profitable.

Now this may seem like it's voodoo to those who don't know how to do it, but every option chain offers this information in some form or another. In the ToS platform, they provide metrics that will show you probability OTM, probability ITM, and probability of touching. These come in very handy. It's as easy as changing the settings of the option chain, and they become visible for every option you look at. If you don't have these metrics available through your broker/platform, then you can always gauge the probabilities by the Delta. You just have to look at Delta as a percentage scale, and your golden. For example, if an option you're considering is Delta .30, then that option roughly has a 30% chance of expiring ITM, or 70% of expiring OTM.

Imagine how much your trading will change when you can look at that OTM option you're thinking about buying, and realize that the probability of it staying OTM is 80% in the current market environment. Yea, that option may be cheap, but it's cheap for a reason, and suckers like you have been taking that bait for years in hopes that your cheap investment will turn into a big winner; when the reality is that there is only a 20% chance that it will become profitable. Ouch. Want the bleeding to stop? Then stop placing trades based on price, and start placing them based on the probabilities that they will become profitable. Place enough of these trades, and over time your equity curve will thank you.

3. Focus on managing your winners, not your losers.

This was mentioned a little earlier, and it's a concept that is taught in very few places, but it's catching on because it actually works. The general knowledge base would have you focus on managing the losing trades with very little emphasis on what to do with winning ones. Well that way of thinking is outdated, and frankly does not work. As I stated earlier, if you're following proper risk management rules, then you never have to worry about your losers (provided you're also following #2), and you can shift your focus onto what it should be doing in the first place; profit taking. After all, you do want to be in the business of making profits right?

So how do we manage our winners? The answer is simple. Take your profits when you have 25 to 50 percent of your max profit potential. Yes, you read that right. Don't get greedy, and don't risk taking your trade to expiration. There are too many variables at play, and every trade stands to be a winner, and a loser at some point in time. So if you're making high probability trades (anything above 65%), and taking your profits when you have them, you'll be increasing your probability of success dramatically.

There you have it. 3 Unique ways to increase your trading success, by focusing on probability of profit. I know these ideas work from first hand experience, and if I can profit from them, then so can you. If you have anything to add, or have any questions you would like to ask, feel free to leave something in the comment section below.    

How to Manage Risk: 10 Rules to Keep Your Trading Profitable

Whether you're a budding trader, or you've been doing this a long time; if you haven't learned how to manage your risk, then chances are you've blown out a few trading accounts, or are on the verge of doing so.

Risk management is of the utmost importance for every trader, and should be thought of as the number one reason traders fail at their profession. If you haven't been told, or have simply ignored the advice, I'll lay it out simply for you here:

1. Before you ever place a trade. Know how much risk you have on the table. In other words, how much you stand to lose.

This may seem like a given, but the fact remains that there are many traders who like to fly by the seat of their pants, and focus on how much they stand to make instead of what they could possibly lose if things don't go as planned.

2. Never ever risk more than 1 to 5 percent of your total capital.

This is a hard and fast rule that should be applied no matter what. It is a common trap to allow yourself to risk a lot to gain a lot. This comes with the idea that you're gonna make some quick cash to establish your trading account, and then start following the proper risk allocation once that happens (at least that's what my thinking was like). Well let me tell you, it doesn't happen. If you can't follow proper risk management now, then you won't be able to follow it with more money in your account. If you have a smaller account (less than 75,000) then 5% is okay, but if you're managing above 100,000 then you should risk no more than 1% per trade. You should never feel anxiety or stress over a trade that has hit max loss.

3. Place high probability trades.

This is such a simple statement, but it's another one of those over looked ideas that traders make. Instead of buying OTM options. Try selling them. By simply selling an OTM option you increase your probability of profit enormously. On the other hand, why would you want to purchase anything with less than 50% probability of profit? Not to mention the fact that every day you hold it it decreases in value. It's very closely related to trying to paddle upriver with your hands for paddles. It may work once and a blue moon, but your gonna lose on a consistent basis. If you're gonna buy an option, buy ITM. 

For more ideas on how to make high probability trades you will want to check out this article: 3 UniqueWays to Increase YourProbability of Profit.

4. Don't wait till expiration. Take profits at 50% profitable.

Here is a novel idea that ties in with the last one. Option expiration week can be a crap shoot, and a winning trade can quickly be replaced by a losing one. By placing high probability trades, and taking your profits when you have them, you will not only become consistently profitable, but you will also be seen as one of the smarter guys in the room. Since every trade has a probability of being a loser, and a winner, it's just best to take your winner when it shows up without sticking around. Studies done by TastyTrade have shown that taking profits at 50% provide the biggest edge with the least amount of risk.

5. Place as many trades as possible.

This may seem counter-intuitive, but if you're following rule number 3 you want as many trades placed as possible so that the numbers can fall into place. The more instances you have, the greater the likelihood that the probabilities you trade, will play out. Everyone has winning, and losing streaks. The key is to keep it averaged out so that the losing streaks don't eat into your profit taking.

6. Give yourself enough time to be right.

Since all trades have the chance that it will be both a winner and a loser at some point. You want to make sure that you are giving yourself enough time to be right. This generally means placing your trades from 30 to 60 days out. In the world of weekly options this can seem like a waste of time, but remember, we can successfully manage our risk by giving our trades the greatest chance to succeed, and time gives us an edge that weekly options traders will never have.

7. Use the right strategy for the right environment.

Not all trades are created equal. It is vitally important to keep track of IV Rank (Implied Volatility), and percent change. These two factors can help you gauge whether or not that Iron Condor can best be used instead of a Calendar Spread. Remember, there are a variety of strategies that can be implemented best in certain market environments. Knowing these strategies, and learning how to read the market will give you another edge to keep risk low, and profits up.

8. Don't be afraid to sit in cash.

Sitting in cash waiting for the right set-up can seem like a waste of time when you could be trading. The reality is, that being in cash is a trade, and there are times that it is okay to wait. Being in a rush, and looking for trades that aren't there is a risky endeavor, and has never gotten me closer to my trading goals. You'd be better served to wait for your trade set-ups, or even spend time paper trading (or researching) new ones that will give you more options for more market conditions.

9. Plan your trades, trade your plan.

This is one of those sayings that floats around the trading education scene a lot. It is an extremely important risk management tool though, and you would be hard pressed to overlook it. No business can be successful without a focused plan, and the same holds true for trading, because it is a business. If you don't look at trading as a business, then you need to start doing so. Having a focused and detailed trading plan will provide you with a tool to fall back on in times of stress. Knowing your trading plan, and following through with it will also help you be more consistent, and accountable.

10. Trade with enough capital.

How much capital is enough? Well, it all depends on your trading plan, and what strategies you plan on using. For a small account though, I'd say no less than $10,000. This will give you enough capital to place spread trades that are $5 wide without breaking rule number 1. That means you can implement most strategies and keep your risk down to appropriate levels. More capital is always better though :).

There you have it. Risk management in 10 easy to follow rules. Just don't let your ego/greed get in the way, and it truly is easy. I think I've broken all of these rules at one point or another and have learned the hard way. Greed, impatience, and ego are all things that we traders have to master, and gain control over. Consistently practicing these proper risk management rules will help you overcome your trading pitfalls.

Have you broken these rules? Have a question? Just wanna leave a comment? Have something to add? Feel free to leave something in the comments.   

Trade Update: Taking Profits on High IV Trade

The recent high Implied Volatility in the market prompted up to place a trade that takes advantage of such conditions last week. 

If you can recall, I sold the 1800 puts with 14 days to expiration at 3.60. Well, today the IV deflated as the market climbed a little higher after last weeks sell off.

(Here's the link to the original trade)

I was able to buy the puts back at 1.15 for a profit of 2.45, or $245 dollars per contract. This put me at a profit of 68% of the total max profit. Well above my expected goal.

Here's what the current market is showing as of today:

If you look at the top left hand corner of the chart, you will see the current IV rank showing as 41%. On Friday when we placed this trade, the IV rank was around 64%. 

So over the course of just the weekend, with a shift in IV, and the right strategy, we can secure quick profits by taking advantage of situations that happen. Seeing your trade, placing it, and taking profits early are essential for keeping risk low, and profits climbing!

Stay tuned for the more upcoming trades. 

Options Trading Lesson 4: A Basic Guide to the Greeks

Since the Greeks are well, Greek to anyone reading this, I'm only going to introduce them at a basic level in this lesson. I can remember not really grasping them at first, but after some trading experience, and more in depth study they became some very useful tools for me. So without further ado, let us begin!

The names, and definitions are as follows:

• Delta: Measures the rate of change of the option value in relation to the value of the underlying asset. So in other words, it allows us to track how much the price of our option should change if the underlying asset were to go up or down in value. For example, if we own an option with a delta of 0.5, and the underlying stock goes up by $10. Then our option price should go up by $5. Keep in mind that Delta, as well as all of the Greeks are a moving target, and will be constantly changing in relation to the movement of the underlying asset.
• Gamma: Measures the rate of change of Delta in relationship with the underlying asset. So, as mentioned previously; the Greeks are constantly adjusting with the underlying asset. Gamma simply helps you see how much Delta should change in accordance with the movement of the underlying asset.
• Theta: Measures the sensitivity of the option to the value of time (Extrinsic Value). It portrays the expected amount of value decay you can expect per day with the option you bought or sold. It's what option traders refer to when they talk about "Time Decay." Time decay is an option sellers best friend, and an options buyers worst enemy.
• Vega: Measures the options sensitivity to volatility changes in the underlying asset. It helps you gauge how much value the option stands to gain or lose given a fluctuation in the current volatility environment. As you'll see, or may even know now, there are certain trades that are better suited for low volatility environments (Calendar Trades...), and other trades that are better suited for high volatility environments (Strangles, Iron Condors...).
• Rho: Measures the options sensitivity to the interest rate of the underlying. This is the Greek that is often left out, and unused as it does not have as huge an impact on the underlying as the other Greeks do.

Here is an example of what the Greeks look like in the option chain:

Well, that sums up the basics of the Greeks. Hopefully you have gained something from this lesson. There is a lot of information to learn about the Greeks, and more in depth lessons will eventually be added. In the mean time, post any comments or questions, and feel free to browse through the Lesson Archive, and the Trade Review Archive.  Cya Later :)

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Taking Advantage of High Volatility

In Response to the high Implied Volatility increase from yesterday. I decided to open a trade that takes advantage on this increase.

It's a rather simple trade. I sold the 1800 puts on SPX with 14 days to expiration. I got them for a 3.60 credit with a Delta of 9 and Theta of 50. This means that I picked up $360 per contract with a probability of the option remaining out of the money around 91%, and the Theta tells me I can expect to see the rate of decay at about $50 a day (this will increase a little every day until expiration).

Now I only added the puts because I can go further out on the put side than the call side, and I see that we have already touched the 21 week moving average for the SPX. The SPX's response to the past times it has touched this level has been to come back, and offer some resistance at this level. This doesn't mean that it can't go through, and blow my theory to smithereens, but I do trust the probability that it won't 91% of the time. Here's the chart that I was looking at:

The yellow line represents the 21 week moving average. As you can see from past dips down, the line has held. Now if we do see the SPX continue to break down, and we have a few consecutive weeks below the line. Then I would consider that a trend reversal is taking place. 

In addition, I'll be sure to update you and let you know what I do with the trade if I happen to have to make an adjustment or take it off. Generally I'll take my profits at 50%. So my goal is for theta to crush the value of the option until I see it worth around 1.80.

Options Basics Lesson 3: Intrinsic and Extrinsic Value

This Options Trading lesson is focused on Intrinsic, and Extrinsic value. Since this is a concept that some people take time to grasp, I will explain the two definitions in a couple of different ways.

First of all. What are the definitions of Intrinsic, and Extrinsic value in relation to trading Options?

• Intrinsic Value refers to the In the Money options found on the option chain. It deals with the relationship of a specific strike to the actual price of the underlying stock. For example: If you purchased the $20 call strike on XYZ, and the value of the stock increased to $30, then the Intrinsic Value of your option is $10. Note that the Intrinsic Value will never go below 0. If the math brings your Intrinsic Value below 0, then all of your strikes current value falls into the Extrinsic side.
• Extrinsic Value refers mainly to the Out of the Money options. Extrinsic Value is based on the time the option has left until expiration. These Out of the Money options tend to decay in value rather quickly over time because they lack any real value other than the probability that they will become valuable at some point in the expiration cycle. In the Money options will have both Intrinsic, and Extrinsic value, but Out of the Money options will only ever have Extrinsic value associated with them.

Another way to look at these terms is to simply look at them as Real Value vs. Time Value. When you buy or sell an option, these two factors will affect the price. An option with Real value (Intrinsic) will always have some Time value (Extrinsic) built into it, and because of this, the option is able to keep its value over time better than an Out of the Money option with just Time value. This is why it's always smart to purchase options that have real value (ITM), and to sell options that have time value (OTM), but that is a lesson for later. 

Here is a visual representation of the Option Chain with the Intrinsic and Extrinsic values for your viewing:

As you can see, Intrinsic value only relates to any strike that is ITM, but both ITM, and OTM Calls, and Puts have Extrinsic value because of the time left until expiration. 

That sums up this lesson! Next lesson will deal with the basic definitions of the Greeks. Don't forget to leave your comments and questions below.

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Lesson 2: Strike price and Option Chain

In this lesson we will learn a few new terms, and introduce the option chain. Be sure to check out Lesson 1 if you need to.

Strike or Strike Price

• The strike price or strike is what the options are trading at in comparison to the underlying stock. These can be represented in $.50, $1.00, and even $5.00 increments depending on how big of a move any given underlying is expected to make. 

At the Money, In the Money, and Out of the Money

• At the Money refers to the current strike price at which the underlying stock is trading at. For example, if the Stock XYZ is trading at 97, then your At the Money (ATM for short) strike will be 97.
• In the Money refers to any strike that falls within the parameters of Intrinsic value (we'll discuss Intrinsic vs. Extrinsic value in Lesson 3). In other words, it is any strike that is above the ATM strike on the Call side, and any strike that falls below the ATM strike on the Put side.
• Out of the Money refers to any strike that falls within the parameters of Extrinsic value. This is essentially the opposite of the ITM (In the Money) definition. So, any OTM (Out of the Money) strike is what falls below the ATM strike on the Call side, and whats lies above the ATM strike on the Put side.

If that's too confusing (which at first it may be), then here is a visual representation of the option chain:

In this option chain, just like any other, the Calls are on the left side, and the Puts are on the right side.

As you can also see in the picture. The option chain has number of different columns that contain specific information. The Bid, and the Ask columns will be the same for any option chain you look at. All of the other columns are customize-able, and will vary based on the information you wish to see.

So what are the Bid/Ask columns about?

• The Bid column represents the current market price if you wish to sell (or short) the option. As you can see, both Calls, and Puts have a Bid/Ask spread. Meaning you can Buy or Sell Calls, and Puts as discussed in Lesson 1.
• The Ask column represents the current market price if you wish to buy the Call or Put option.

*Trading Tip: If you want the most competitive, and best price, never use the Bid/Ask as you see in the chain. There is always a Theoretical Price (or Theo Price as you see in the chain above) that will most likely be filled, and you save some money. The Theo price is typically the difference between the Bid, and the Ask. So, if you can't add the Theo price to your option chain. Just split the difference between the Bid/Ask, and you have it.*

Alright, that is the end of Lesson 2. It should be enough to help you expand your working knowledge of Options Trading, and help you stay sane enough to remember what taught. Remember, if you have any questions, feel free to leave them in the comments.

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Taking Profits: SPX Calendar Spread

According to the rules in my trading plan, I took profits on the SPX Calendar Spread that I placed just last week.

My profit taking rules are simple: When this trade gets to 15-20% profit, I remove the trade. We originally purchased this spread for 11.50 and were able to sell it back for 13.90. That is a profit of 2.40 or $240 per contract, and a profit of 20.8% on capital.

Here is a look at what our risk profile looks like when we come into a profit like this so cleanly:

The solid white line shows our current profit relative to our max profit/loss which is represented by the solid red line. The current price at which we are trading is shown on the dotted white line. It is represented by the orange vertical line.

Now this trade only took 1 week for us to come into a profit, and no adjustments were needed. But that is not how every one of these trades will turn out. Since this is an income trade, I will continue to place them every month so at some point I will be able to show you how I make adjustments, and when I decide when the trade will not work out.

Useful Trading Tools: IV% Rank, and % Change thinkscripts for thinkorswim

There is a tool that I have come to use, and cherish every day in my path to becoming a better trader. I took this tool from the very first segment of "Game Changers" video's posted from TastyTrade, which is simply a visual representation of the IV% rank, and %Pricechange over a period of time (the default is 10 days, but you may change that at your discretion) shown in the upper left corner of your ThinkorSwim chart.

This information at a glance proves to be very useful in monitoring for trade set-ups, and strategies. I personally use it to also gauge the general market environment.

If you're interested in adding this to your quiver here is the thinkscript taken from the TastyTrade video as mentioned above: 

*Please note that I do not take any credit for this thinkscript, but only wish to share something that I find very helpful.*

Price Percentile Script:

1) Go to 'Charts' tab
2) Click on the "eye-dropper" icon (officially called "edit studies icon"...same line where you type in the ticker same symbol, first icon moving left to right)
3) Click on "New"... Lower left hand corner
4) Delete everything in the box. (plot Data = close;)
5) Paste the entire code listed below
6) Name the study PricePercent
7) Click 'OK'
8) Click 'Apply'
9) Click 'Ok'

input length = 10;
input price = FundamentalType.CLOSE;
input pricePercentUP = 5.0;
input pricePercentDOWN = -5.0;

def priceday= Fundamental(price,period = aggregationPeriod.DAY);
def high=Highest(priceday[1],length);
def low=Lowest(priceday[1],length);
def PcntChHigh= 100 * (priceday / high -1);
def PcntChLow= 100 * (priceday /low -1);
def PercentChg = if(AbsValue(PcntChHigh)>=AbsValue(PcntChLow),
Round(PcntChHigh, 2),
Round(PcntChlow, 2));

AddLabel(1, Concat ("% Price Chng:", PercentChg ),if percentChg >= pricePercentUP then color.dark_green else if percentChg <= pricePercentDOWN then color.red else color.gray); 
------------------------------------------------------------------------------------------------------
IV Percentile Script: 

1) Go to 'Charts' tab
2) Click on the "eye-dropper" icon (officially called "edit studies icon"...same line where you type in the ticker same symbol, first icon moving left to right)
3) Click on "New"... Lower left hand corner
4) Delete everything in the box. (plot Data = close;)
5) Paste the entire code listed below
6) Name the Study
7) Click 'OK'
8) Click 'Apply'
9) Click 'OK'
 
declare upper;
input period = AggregationPeriod.DAY ;
#hint period: time period to use for aggregating implied volatility.
input length =252 ;
#hint length: #bars to use in implied volatility calculation.
def ivGapHi = if isnan(imp_volatility(period=period)) then 99999999999 else imp_volatility(period=period);
def ivGapLo = if isnan(imp_volatility(period=period)) then -99999999999 else imp_volatility(period=period);
def periodHigh = highest( ivGapLo,length=length);
def periodLow = lowest( ivGapHi, length=length);
def ivRange = periodHigh - periodLow ;
def ivp = round( 100*(imp_volatility(period=period) - periodLow)/ivRange, 0);
 
AddLabel(1, Concat("IV% ", ivp), if ivp > 80
     then Color.Green
     else if ivp < 80 and ivp > 50
     then Color.Yellow
     else color.Red);

Hints:     
a) Use 252 as input length for 1-year or 52-week IV percentile
b) You can change 252 to 189 for 9-month IV percentile
c) You can change 252 to 126 for 6-month IV percentile