An Introduction to thinkorswim
Having access to advanced trading platforms is crucial for success as a day trader. One of the best platforms available to the public is thinkorswim. Developed by TD Ameritrade, thinkorswim offers a wide range of powerful tools and features designed to work for both beginner and advanced traders. In this comprehensive guide, we’ll dive into the basics of thinkorswim and explore its key features and functionalities.
What is thinkorswim?
Thinkorswim is the full package available on desktop, mobile, and the web. As a powerful and feature-rich trading platform developed by TD Ameritrade, it is designed to provide traders with advanced tools and resources for analyzing markets, executing trades, and managing investment portfolios.
The built in scanner can generate trade ideas based on custom criteria you set. You can then analyze your ideas in the charting widget using a variety of drawing tools and technical indicators. Don’t see what you’re looking for? Thinkscript, the programming language of thinkorswim, allows you to code custom indicators. The fundamentals of any company you want to trade are also available as a phase score. Once you have a trade plan, the active trader widget makes it efficient to execute the idea with the right order on the depth of the market ladder. Managing your open positions is easy in one simple dashboard under the monitor tab.
Who uses thinkorswim?
thinkorswim is used by over 11 million traders, including individual investors, active traders, and institutional traders. It caters to various trading styles, such as day trading, swing trading, options trading, and futures trading. Whether you’re a beginner looking to learn how markets operate or a seasoned trader seeking advanced analysis tools, thinkorswim can accommodate your needs.
Is thinkorswim free?
Yes, thinkorswim is free to use for TD Ameritrade customers. You can access the platform by opening an account with TD Ameritrade, which offers a range of account types, including individual, joint, and retirement accounts. While the platform itself is free, there are commissions on options, futures, and forex trades. Stock trading is zero commission.
Does thinkorswim have a minimum deposit?
Direct from the TD Ameritrade website:
- There is no minimum funding required to open an account. However, special promotional offers may have requirements.
- Electronic funding minimum is $50.
- Margin or option privileges on the account require a minimum of $2,000.
How can I transfer funds to thinkorswim?
TD Ameritrade offers various options for funding your thinkorswim account. You can transfer funds electronically from your bank account, initiate a wire transfer, or deposit a check. TD Ameritrade provides detailed instructions on their website to guide you through the fund transfer process. If you ever want more detail or support, call the helpline. Remember that brokers are working on your behalf to earn you as a customer, and any reliable broker will have a representative who can easily answer that question.
Is thinkorswim safe?
TD Ameritrade is a reputable and well-established brokerage firm founded in 1975. Currently as of 2023 the broker-dealer is being acquired by Charles Schwab. thinkorswim is TD Ameritrades flagship trading platform. The platform incorporates advanced security measures to ensure the safety and privacy of users’ sensitive data and transactions. TD Ameritrade also offers additional account protection through SIPC (Securities Investor Protection Corporation) coverage of up to $500,000 in the event of a firm failure.
TD Ameritrade has also purchased additional insurance that protects up to a combined return of $152 million per customer, up to $2 million of which may be cash.
How do I set up thinkorswim?
Setting up thinkorswim is a simple process. Once you have opened an account with TD Ameritrade, download the thinkorswim platform from their website. Follow the installation instructions, and once the platform is installed, log in using your TD Ameritrade account credentials. The platform will guide you through the setup process, including customizing your layout, configuring preferences, and enabling real-time market data subscriptions. If you ever have issues or questions on installation and configuration, call the support desk.
Before diving into your funded account, familiarize yourself with the trading platform by using “paper money” which is the demo account that comes with every thinkorswim installation. The purpose is to get familiar with the mechanics of the platform and how to execute trades without risking your hard earned capital.
Pro tip: Ask through the support desk to get real time data enabled for your demo account. Data will have a 20-minute delay if that is not enabled.
How do I buy stocks on thinkorswim?
After logging into the platform, go to the “Trade” tab at the top of the window. In the top left search bar type in the ticker for the company or instrument you are looking for. If you don’t know the ticker, the company name will do and thinkorswim will automatically search for the ticker associated. Once the ticker has been loaded, the top quote will have a bid and ask that is clickable. To buy click on the bid and an order entry window will pop up. From there you can change the quantity, order type (market or limit), price (if limit), and duration the order will stay in force for. Review and submit!
For a better trading experience, use the “Active Trader” module. In that module you will be able to see the depth of market (DoM) on a ladder and submit and maneuver orders more easily on the DoM. The settings at the top of the module allow for quantity adjustment, using preset templates for advanced order types, and the ability to “flatten” your position with the click of one button. Hot keys can be set for each button or action.
According to thinkorswim, and a third party audit from S3 Matching Technologies, the average time it takes to execute an order is 0.04 seconds.
How do I buy options on thinkorswim?
Navigate to the top “Trade” tab and search for the underlying you wish to buy options on. Once you’ve found the underlying instrument, in the “All Products” sub-tab you can navigate to the Option Chain. From there open up the drop downs and search for the series of expiration you want. Calls are on the left and puts are on the right. Select your strike and click on the bid or ask. An order details window will pop up and you can change the quantity, strike and expiration, order type (market or limit), price (if limit), and duration. Review the order details and submit the order. thinkorswim will provide real-time order status updates, and you can monitor your positions in the Positions and Account window.
Options can also be traded in the active trader module just like stock.
Where are the charts on thinkorswim?
Thinkorswim provides a wide range of charting capabilities. To access charts on thinkorswim, navigate to the Charts tab. Pretty intuitive. From there, you can select various chart types ranging from basic line charts, candle charts, and even monkey bar charts. Technical indicators and studies can be applied by clicking on the beaker icon at the top of the chart window to suit your preferences. The platform offers advanced charting features, including drawing tools, time frames, and the ability to save and share your chart layouts. To learn how to fully customize them check out this article here: How To Customize ToS Charts
What is thinkScript?
thinkScript is a proprietary scripting language developed by thinkorswim for creating custom studies, strategies, alerts and scans. With thinkScript, traders can leverage the power of custom coding to develop and test their own technical indicators and trading systems. The platform provides extensive documentation and resources to help users learn and master thinkScript.
Conclusion
thinkorswim is arguably the most robust and versatile trading platform with no platform or data fees. With its extensive range of features, intuitive interface, and powerful analysis tools, thinkorswim empowers traders of all skill levels to make the most informed trading decision they can. The best way to get familiar with the platform is to get in there and start exploring.