How to Trade on Thinkorswim with Advanced Strategies

Thinkorswim is an advanced trading platform that offers a wide range of tools and resources for traders of all levels. With its powerful features and customizable layouts, it's no wonder that many traders rely on it to execute their trades.

To get the most out of Thinkorswim, it's essential to understand its advanced strategies, such as using conditional orders to automate your trades. As we'll explore in this section, these strategies can help you stay ahead of the market and maximize your profits.

Thinkorswim's advanced order types, like the "One Cancels All" (OCA) order, allow you to set multiple orders at once and cancel them with a single action. This feature can save you time and reduce your risk exposure.

Thinkorswim is a free trading software available from TD Ameritrade.

You can use it to buy stocks and options in the stock market. TD Ameritrade customers can download Thinkorswim from the TD Ameritrade website.

Thinkorswim is available in different versions: desktop, web, and mobile. This means you can access your trading platform on your computer, through a web browser, or on your mobile device.

Thinkorswim is a free trading software available from TD Ameritrade. It's a powerful tool that allows you to buy stocks and options in the stock market.

You can download Thinkorswim from TD Ameritrade's website, and it's available in different versions: desktop, web, and mobile. This makes it easy to access and use Thinkorswim on your preferred device.

Trade executions are generally fast, with an average time of 0.06 seconds for market orders to be executed. This is impressive and can give you a sense of confidence in your trades.

Thinkorswim is a user-friendly platform that offers a lot of features and tools to help you make informed decisions. You can even find detailed information about a company, including its valuation highlights and key trends.

An OCO order is a type of order used in stock market trading that allows you to set up two different orders for a position: one for a profit target and another for a stop loss.

OCO stands for "One Cancels the Other", and it's an order type used to simplify trade management.

One key feature of an OCO order is that when either the profit target or stop loss order gets filled, it automatically cancels the other order.

There are several benefits to using a Thinkorswim OCO order, including Simplified Trade Management, Automatic Cancellation, Efficient Use of Buying Power, Risk Management, and Convenience.

Here are the benefits of a Thinkorswim OCO order in more detail:

To set up a Thinkorswim OCO order, you'll need to change the Template from "Single" to "OCO" in the Active Trader window, choose the TIF settings, input the Offset value for your stop loss, and ensure the quantity matches the number of shares or contracts you want to sell.

Thinkorswim's charting capabilities are quite impressive, with over 400 different charting patterns to choose from. You can get really excited about the one that suits your trading style.

The default chart style is a candlestick, with a price column on the right and time along the x-axis. Rectangular bubbles display the lowest and highest prices in the time frame, and icons indicate earnings announcements and stock splits.

You can adjust the time frame, colors, cursor, and even the background to customize your chart. This is especially useful for charting enthusiasts who want to get the most out of their analysis.

One of the features I like about Thinkorswim's charts is the ability to add studies such as volatility indicators. This can help you gain a deeper understanding of the market and make more informed trading decisions.

You can also make notes with drawings directly on the chart, which can be a big help for visualizing your ideas and tracking your progress.

Thinkorswim is designed for active traders and investors who want to interact with the market. TD Ameritrade has 11 million client accounts with over $1 trillion in assets.

The platform is perfect for both beginners and experienced traders. It offers a wide range of technical features and trading tools that cater to different levels of expertise.

JJ Kinahan, chief market strategist at TD Ameritrade, emphasizes the platform's versatility. "It is very detailed", he says. "It allows you to trade at a very basic level, or at the most complex level you’d like to."

Thinkorswim's interface is user-friendly, with nine tabs that provide easy access to various features. These tabs include Monitor, Trade, Analyze, Scan, MarketWatch, Charts, Tools, Education, and Help.

Automated trading on ThinkOrSwim is a game-changer for traders who want to execute their plans without emotions getting in the way. It allows you to build a plan via code and set it to execute on its own, eliminating the need to constantly check charts and worry about making impulsive decisions.

You can use automated trading to replicate proven trade ideas and patterns, and even outsource much of the machine work to the ThinkOrSwim platform. This is especially useful for managing multiple positions, as it helps you stay on top of your trades without getting overwhelmed.

To get started with automated trading, you'll need to navigate to the automated trading window, which can be accessed by clicking the settings gear icon on an order in the "Trade" tab. From there, you can customize the method to be a study, where you can input custom thinkScript code and reference previously built studies to incorporate your own set of automated trading conditions.

Here are some key options to consider when setting up automated trading:

For example, you might use automated trading to automatically sell a covered call against a pre-existing position when price hits a certain level, such as the 2.00 retracement level. This can help you collect rent on an already profitable position and eliminate the need to constantly monitor the trade.

Trading platforms vary in their features, and one key difference is whether they offer OCO orders. Not all trading platforms offer OCO orders, as mentioned in Example 4. This is one reason Thinkorswim is popular among active traders.

OCO orders are particularly useful for active traders who want to set sell orders for both a profit target and stop loss. Thinkorswim's inclusion of OCO orders sets it apart from other platforms.

Some major trading platforms do not include OCO orders, which can limit the trading strategies available to users. This is a key consideration for traders who rely on OCO orders to manage their positions effectively.

To give you a better idea, here's a brief rundown of some popular trading platforms and their OCO order policies:

As you can see, Thinkorswim is one of the few platforms that offer OCO orders. This makes it a valuable tool for active traders who want to automate their trading strategies and manage their risk.

Automated trading helps us replicate trade ideas and patterns we've backtested, which we'd like to replicate.

Most trade ideas aren't original, so we need to execute on our plan to be successful.

Automated trading in ThinkOrSwim lets us build a plan via code and execute it on its own, eliminating emotions at the time of execution.

We can outsource the machine work to the ThinkOrSwim platform, making it easier to manage multiple positions.

However, automated trading in ThinkOrSwim has its own set of shortcomings, and it's not a platform meant for auto-trading.

It's more like semi-automated trading, with limitations in terms of studies and built-in functions it supports.

Automated trading can be a game-changer for traders, allowing them to replicate successful trade ideas and patterns with ease. By building a plan via code, traders can eliminate emotions at the time of execution and avoid the hassle of constantly checking charts.

The ThinkOrSwim platform offers automated trading capabilities, but it's essential to note that it's not a platform meant for auto-trading. Traders can push the platform to its limits, achieving semi-automated trading, but there are still limitations.

One of the biggest advantages of automated trading in ThinkOrSwim is that it allows traders to outsource machine work to the platform itself. This can be particularly useful for managing multiple positions, which can be a challenge for even the most experienced traders.

The automated trading triggers pane is more limited in terms of coding depths compared to the ThinkOrSwim studies menu. For example, referencing previously built studies like the Market Pulse or VScore can result in errors due to complexity or unsupported features.

To navigate the automated trading window, traders need to have an order in the "Trade" tab and click the settings gear icon to open up the automated trading panel. From there, they can control various settings, such as linking the execution price to the bid, ask, mid-price, last, etc.

Here are 8 trigger scenarios that can be built using automated trading:

By leveraging these scenarios, traders can create automated trading plans that help them execute their strategies with greater efficiency and accuracy.

As a Thinkorswim trader, you can use various strategies to execute your trades. One approach is to use the platform's built-in scanners to identify potential trades, such as the "Scanner" feature that allows you to search for stocks based on specific criteria.

To implement a trend-following strategy, you can use the Moving Average indicator, which can be added to your chart by going to the "Indicators" tab and selecting "Moving Average". This indicator can help you identify the direction of the trend.

By using the Thinkorswim platform's advanced features, such as the ability to trade options and futures, you can diversify your portfolio and potentially increase your returns.

As we dive into the world of trading strategies, it's essential to have clear and actionable triggers in place. Having a solid foundation of triggers can help you stay focused and make informed decisions.

Scenario 1 involves buying MSFT if it crosses above $175 in the first 15 minutes. This is a clear and concise strategy that can help you capitalize on a strong market move.

To build a robust trading strategy, it's crucial to consider multiple scenarios. Scenario 2, for example, involves selling an HD Iron Condor when the price is between $195 and $200. This strategy can help you manage risk and lock in profits.

Scenario 3 takes a more nuanced approach, involving selling a covered call on pre-existing 100 shares in LVGO when the price hits the 2.00 extension. This is a great way to collect "rent" on a profitable position.

Knowing when to close a position is just as important as knowing when to enter one. Scenario 6 involves closing a position when squeeze momentum starts to decline.

Here are the 8 triggers to build, laid out in a concise format:

Remember, building a solid trading strategy takes time and practice. By incorporating these 8 triggers, you'll be well on your way to developing a robust and effective approach to trading.

Buying on pullbacks is a trading strategy that involves entering a trade when the price of a stock pulls back to a specific moving average. This can be a reliable way to catch a trend.

You can use exponential moving averages (EMAs) to identify trends. For example, stacked moving averages like 8 EMA, 21 EMA, and 34 EMA can indicate a bullish trend.

The 34 EMA is a popular choice for buying on pullbacks. It's a good idea to buy on trend pullbacks to the 34 EMA when the trend is strong.

To automate this strategy, you can use thinkScript to enter into a stock that has stacked moving averages. This will allow you to buy on pullbacks to the 34 EMA.

Buying on implied volatility pullbacks is another strategy that involves entering a trade when the implied volatility (IV) of a stock pulls back to the 34 EMA. This can be a good way to catch a trend.

You can use a Moving Average Pullback Backtester to test this strategy and see what happens after the trigger conditions are met. This will help you refine your approach and make more informed trading decisions.

You can sell a position when the squeeze loses momentum, which often happens when the histogram bars show a decline. This is typically a good time to lock in profit.

The squeeze firing has usually been a good time to exit trades, allowing you to maximize profit. You can use automated trading in ThinkOrSwim to manage an existing position, rather than entering a new one.

In Scenario 6, we're assuming you're already in a position due to a TTM_Squeeze. You'd like to exit as soon as the histogram bars indicate losing momentum.

By recognizing the squeeze losing momentum, you can make informed decisions about when to sell a position. This can help you avoid further losses and lock in gains.

Layering multiple indicators is a powerful strategy that can help you bypass complexity errors in trading platforms like ThinkOrSwim.

By combining multiple conditions, you can create a more robust trigger that's less prone to errors. This approach is all about simplicity and clarity.

The key to successful layering is to focus on basic indicators that work well together. In Scenario 7, we combined three conditions: a TTM Squeeze, greater than average volume, and EMAs agreeing with the overall trend.

Here's a breakdown of the conditions used in Scenario 7:

* TTM Squeeze: A condition that indicates a potential breakout.Greater than average volume: A condition that suggests increased market activity.EMAs agreeing with the overall trend: A condition that confirms the direction of the market.

By layering these conditions, you can create a more reliable trigger that's less likely to produce false signals. This approach requires careful consideration of each condition and how they interact with each other.

The Trend Break Sell strategy is a crucial part of any trading plan. This approach involves closing out a trade when the 3 EMAs are no longer stacked.

To trigger this sell, we need to set up a custom code that checks the alignment of the EMAs. The code should be part of the sell order, just like the buy order has its own custom code.

We can use the same scenario as Scenario 8b, where we sell when the 3 EMAs are no longer stacked. This will help us close out the trade for a gain or a loss.

This strategy is especially useful for traders who want to minimize their losses and lock in profits. By setting up a Trend Break Sell, we can automate this process and make more informed trading decisions.

The Trend Break Sell strategy is just one of the many tools we can use to improve our trading results. By combining it with other strategies, we can create a robust trading plan that suits our needs.

You can use the RSI signals to buy a put whenever you have a bearish breakout signal. The larger the time frame, the more powerful the signal should be.

For a daily SPY chart, it's a good idea to buy a put that's at least 90 days out, to give yourself time and the trade time to play out without needing to re-update the trigger conditions.

This strategy works by attaching a simple line of code to the Triggers pane of the put you want to use. The code is: "[1]" to reference the previous bar and confirm that the signal has finished printing.

The code is powerful enough to trigger automated trading in ThinkOrSwim to place an order whenever the bearish signal appears.