Customizing the Workspace and Active Community
A noteworthy aspect of Thinkorswim is its workspace customization. This feature offers users the ability to tailor their workspaces according to their individual preferences, making the platform inherently intuitive and efficient. Paired with the platform's advanced scanner and filtering options, traders are empowered to find specific stocks and options that align with their strategies.
Thinkorswim fosters a highly active trader community, an invaluable resource for those eager to exchange trading strategies, charts, and watchlists. Streaming news from CNBC, Benzinga, and Dow Jones News, alongside access to third-party research, augments the trading experience with a constant feed of relevant and actionable market information.
Technical Tools and Educational Content
The platform’s Analysis tab and ThinkBack feature are innovative tools aimed at improving trading outcomes. The Analysis tab displays an active risk graph, highlighting the most likely outcomes of a trade setup, thereby enabling better risk management. The ThinkBack feature offers historical options prices, allowing traders to backtest their strategies.
Complementing the feature-rich desktop application is Thinkorswim's mobile app, offering on-the-go access to trading functionality, news streams, and charts. The app also hosts a comprehensive learning center brimming with instructional videos and daily “Swim Lessons,” making it an excellent tool for continuing education.
Thinkorswim's integration of Hotkeys speeds up transactions, further enhancing its appeal for day traders.
A Few Considerations
Despite its robust feature set, Thinkorswim does have some drawbacks. The platform’s margin rates are higher than average, which could be a concern for those heavily utilizing margin trading. Moreover, the short list feature is relatively bare, potentially causing issues for short-biased traders.
Another potential hurdle is the platform's complexity. For new traders, the vast amount of information and tools might be overwhelming. Some might prefer a more streamlined platform or even the company's standard web trading platform for a more comfortable initial experience.
A Platform Tailored to Active Traders
Notwithstanding these concerns, Thinkorswim continues to shine as a top choice for active traders. The platform’s high-quality data, customizable charts, and powerful stock scanning technology, make it a viable option for new active traders looking to enhance their trading skills.
One of the major game-changers is the platform’s zero trading commissions policy for smaller deposits, allowing traders to start with as little as $100. This has made active trading in lower float stocks more accessible, providing an advantage over traditional paper trading.
Traders can further circumnavigate the Pattern Day Trader (PDT) rule by opening multiple accounts across TD Ameritrade, E-Trade, Fidelity, and Schwab, thereby enhancing their trading flexibility.
PaperMoney - A Risk-Free Introduction to Trading
TD Ameritrade's Thinkorswim offers a feature called PaperMoney, which is a simulated trading environment. This is perfect for beginners because it lets you trade in real-time, with virtual money. You can test strategies and get comfortable with the platform's array of tools without risking any actual money. It's a hands-on way to learn the ropes before diving into real trading.
OnDemand Functionality
The OnDemand feature allows traders to go back in time and replay trading days. This means you can not only see past price action but also trade it as if it were live. This feature is incredibly useful for backtesting strategies and understanding how specific situations could be traded.
Studies and Indicators
Thinkorswim supports over 300 studies and indicators, from simple ones like moving averages to more complex ones such as the Elliott Wave oscillator. The beauty of this platform is that it also allows you to create your own studies using their scripting language, ThinkScript, offering endless possibilities for technical analysis and strategy development.
24/5 Trading
While the stock market operates from 9:30 am to 4 pm EST, some events can happen outside these hours causing certain securities to move significantly. TD Ameritrade allows 24/5 trading on select ETFs, which means traders can take advantage of these moves and not be confined to the regular trading hours.
Free Access to Premium Research
Thinkorswim users have access to premium research from some of the leading investment research companies like Morningstar, CFRA (formerly S&P Capital IQ), and TheStreet. Having access to professional analysis and opinion can help you make informed decisions.
Real-Time Streaming News and Quotes
Traders need timely information. Thinkorswim provides streaming news and real-time quotes to keep users up-to-date. The platform's real-time data helps traders make immediate decisions based on the latest information.
An Exceptional Offering
Thinkorswim offers the best "bang for your buck" in the discount brokerage space. With zero commissions, a broad range of products to trade, and free access to Thinkorswim, TD Ameritrade emerges as an excellent value for active traders. Especially beneficial for traders with less capital, the platform allows them to avoid the minimum requirements associated with the pattern day trader rule.
TD Ameritrade also focuses on paper trading, aiding traders in becoming familiar with the platform before going live. This feature is a testament to their commitment to helping traders learn and prepare, increasing the likelihood they will remain with Ameritrade when they're ready to transition to live trading.
In Conclusion
TD Ameritrade's Thinkorswim platform is a top-notch choice for active traders. The platform’s high-quality data, customizable charts, and powerful stock scanning technology, along with its zero-commission structure, make it a formidable competitor in the trading platform arena. Though it does have some drawbacks, the pros far outweigh the cons, making Thinkorswim a recommended choice for day traders of all levels.
