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thinkorswim® Tools: Top 5 Questions New Traders Ask About the Trading Platform

Our chief market strategist breaks down the day's top business stories and offers insight on how they might impact your trading and investing.

https://tickertapecdn.tdameritrade.com/assets/images/pages/md/Basic thinkorswim trading tools
8 min read
Photo by Getty Images

Key Takeaways

  • Learn how to use some of the essential tools on the thinkorswim platform

  • Understand how to add technical indicators to charts, maintain watchlists, place trades, and monitor positions

  • When you’re ready to take your knowledge a step further, explore some of the other thinkorswim tools and education resources

When you fire up the thinkorswim platform for the first time, it can be a little daunting. The dashboard flashes lots of changing numbers, charts, a position summary, and more. Where do you start?

To answer that, we collected some questions new users often ask about the trading platform and got answers from the following pros:

  • Barbara Armstrong, education coach, TD Ameritrade Education
  • Rachel Dashiell, trading solutions specialist, Trader Solutions
  • Michael Fairbourn, education coach, TD Ameritrade Education
  • Caitlin Stone, trading solutions specialist, Trader Solutions
  • Andrew Barco, trading solutions senior specialist, Trader Solutions    

So hop in and let’s take the platform for a spin.

Charting Your Course

How can I add studies to my charts?

Charts can show a lot more than price bars. “Many users want to start with a simple indicator such as the 30-day moving average,” said Barbara Armstrong.

That’s a great starting point, and here’s how to do it. On thinkorswim, select the Charts tab, enter a symbol to bring up a price chart, and maximize the chart by selecting Maximize cell from the Symbol actions menu at the top right. One way to add a moving average is to select Studies, then Add study > Moving Averages > SimpleMovingAvg. The default is a 9-period moving average, so if you want to change it to the 30-day moving average (assuming you’re looking at a daily chart), select the moving average and select Edit study SimpleMovingAvg. You’ll see the SimpleMovingAvg Customizing window. Change the length of the moving average from 9 to 30, then select Apply (see figure 1).

Rachel Dashiell pointed out that traders often like to take this a step further by adding multiple moving averages and altering their appearance. In the Customizing window, you can change the style, width, and color of the moving average. To add more moving averages to the chart, just follow the same process you used to apply the 30-day moving average, then customize the period and appearance so you can easily identify each one.  

Adding indicators to price charts on thinkorswim

FIGURE 1: ADDING INDICATORS TO PRICE CHARTS. Bring up a chart from the Charts tab on thinkorswim, add an indicator from the Studies button, and then change the parameters to customize the indicator. Chart source: the thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

Keeping an Eye on the Markets

How can I set up and save watchlists?

Traders need to keep an eye on the markets for potential opportunities. That means setting up a watchlist (one of the gadgets on the left side of the platform). There are different ways to use watchlists. If you’re looking to generate trade ideas or seeking stocks with a certain type of activity, Caitlin Stone suggested using public watchlists or scans. For example, you might look for stocks gapping up or down, upcoming earnings or dividends, and percentage changes (gainers or losers). Get started by perusing the menu located along the top of the watchlist gadget. Of course, you can also create custom watchlists to track your unique interests.

Watchlists can be linked to a chart. “Watchlists can communicate with charts, and you can scroll through each of the symbols on a watchlist. This is a great way to quickly see the chart of each symbol on your watchlist,” said Michael Fairbourn. So if you have multiple moving averages displayed on your chart and you’re looking for, say, a moving average crossover, you can quickly scroll through the charts of all the symbols on your watchlist to spot any crossovers.  

To create or open a watchlist, select the Add Gadget (plus sign) button along the bottom of the left sidebar, then select Watchlist. To select a specific list, use the menu along the top.

Order Entry Choices

How do I place trades?

There are different ways to place orders and different order types. The best method is really the one that aligns with your preferences. For those who aren’t concerned about speed, Stone suggested that the order ticket is an easy way to set up trades. Just choose a price and select buy or sell. But if you’re looking to move quickly (and are not trading options), the Active Trader ladder features a fast way to execute trades on stocks, exchange-traded funds, futures, and forex.

“And you can create and save custom order templates for automated trading,” Dashiell chimed in.

From the Trade tab, select Active Trader (see figure 2). You’ll see a chart on the left side and the active ladder on the right. Considering placing a trade? You can either select the price from the ladder or use the Buy MKT and Sell MKT buttons. The trade will display on the chart. If isn’t exactly where you want it, just move it up or down on the chart to set your desired price.

To customize an order template, select the settings icon. From the Customize window, select to display Order Template Editor and Order Template Selector. Then you just have to select the order template from the list before you place a trade. You’ll find different types of orders, such as OCO, bracket orders, stop limit orders, and more. 

Placing trades on thinkorswim using the Active Ladder
FIGURE 2: PLACING TRADES USING THE ACTIVE LADDER. If speed is important, then you might consider placing trades using the Active Trader ladder. You can select the bid/ask prices directly on the ladder or use the buy and sell buttons. You can also create your own order templates for quick access. Chart source: the thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

Options Trading

How do I place options trades?

Andrew Barco shared his thoughts about how to set up thinkorswim for efficient options trading.

First, set up the Option Chain (see figure 3). Select the Trade tab, then All Products. When you enter a ticker symbol in the symbol box, you’ll see a detailed quote for the underlying symbol. Below that, you’ll see the options expirations, including the expiration date, days to expiration in parentheses, multiplier, and expiration type (weekly, quarterly, or standard).

Next, set up the columns. Open one of the expirations. Select the Layout menu and choose from predefined column setups or customize your own.

For example, you might choose to add Mark, Probability OTM, and Delta for your column layout. This lets you see the true price of each option with the mark price or “midpoint” of the bid/ask, probability of an option expiring out of the money (helpful if you’re a premium seller), and delta, which can be helpful for option buyers.

Next, from the Strikes list, choose how many strikes you want to see.

There are more than a dozen different types of orders, and your choice depends on the frequency and complexity of your trades. A good starting point is to select the bid price to load a sell order and the ask price to load a buy order. This loads a limit order to the Order Entry window, which has default increments of 100 shares for stock trades and 10 contracts for options trades. But these defaults can be customized to load trades with quantities you typically trade. And when you’re ready to take your order entries to the next level, you can experiment with some of the other order types. 

Placing options trades on thinkorswim

FIGURE 3: PLACING OPTIONS TRADES. Before placing an options trade, it’s best to set up the Option Chain to display data that you need. Once that’s done, you can place orders by selecting a bid or ask price. On the Order Entry Tools window, you can make any adjustments to the trade before you send the order. Chart source: the thinkorswim® platform from TD Ameritrade. For illustrative purposes only. Past performance does not guarantee future results.

Monitoring Positions

After placing trades, how do I keep track of my positions?

If you have several positions open, it can be difficult to keep track of them all. Armstrong suggested customizing the information in the Account Statement found on the Monitor tab. You can sort your portfolio by groups, such as dividend-paying stocks, growth stocks, or covered calls. You can also customize the columns so you only see the information that’s relevant to you. For example, you might choose trade price, net liquidating value, profit and loss percentage, and days to expiration (if you have options positions).

From the Monitor tab, select Account Statement. Under Profits and Losses, select by Symbol, by Positions Group, or Overall. To customize columns, select the settings icon at the far right and choose the items you want to display.

Learning how to navigate charts, create watchlists, place orders, and monitor positions should give you the confidence you need behind the steering wheel of the thinkorswim trading platform. Once you’ve figured out how to use these basic tools, you’ll be ready to explore more features. There are plenty of educational tools ready and waiting to help drive your knowledge of the platform. From the Education tab or the TD Ameritrade Education page, you can access webcasts, courses, videos, articles, and much more. You’ll find all the manuals and education you need to guide your trading to the next horizon. 

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Key Takeaways

  • Learn how to use some of the essential tools on the thinkorswim platform

  • Understand how to add technical indicators to charts, maintain watchlists, place trades, and monitor positions

  • When you’re ready to take your knowledge a step further, explore some of the other thinkorswim tools and education resources

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Content intended for educational/informational purposes only. Not investment advice, or a recommendation of any security, strategy, or account type.

Be sure to understand all risks involved with each strategy, including commission costs, before attempting to place any trade. Clients must consider all relevant risk factors, including their own personal financial situations, before trading.

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