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thinkorswim® Trading Tools, Tips, & Tricks: Secrets from the Pros

Hey, trader! Do you know all the trading tools in the thinkorswim® platform from TD Ameritrade? Some of our trader pros share their favorite features and how to use them.

https://tickertapecdn.tdameritrade.com/assets/images/pages/md/Coach: get thinkorswim tool tips from TD Ameritrade team
5 min read
Photo by Getty Images

Key Takeaways

  • The Chart Describer acts like a technical analysis scanner

  • Many active traders use ladders to help them visualize trades and get in and out quickly   

  • You don’t need to be an active option trader to get insight from Today’s Options Statistics

OK, trading veterans: Think you know everything about the thinkorswim® platform from TD Ameritrade? Is it second nature to log in and conduct technical analysis or map out complex options moves?

Even if you consider yourself a thinkorswim black belt, there’s always more to learn. People often get comfortable doing what they’re familiar with and may forget to explore the platform further. Plus, new features are constantly being added that might improve your trading and research capabilities.

We asked a group of thinkorswim pros from TD Ameritrade about their favorite trading features. Some of the tools they touted are the tried-and-true workhorses we use every day. Others are deep under the hood, and still others are relative newcomers to the platform.

Chart Describer (Chesley Spencer, Director, Trading Product Development)

Chart Describer is a new feature in Charts. Find it just to the right of the Share subtab—look for a little box with an “i” sticking out.

The Chart Describer works like a scanner in reverse. Instead of saying, “I want to look at a specific stock symbol with the following technical factors,” it allows you to say, “I know nothing about technical indicators for this stock, but show me what they are.”

The platform knows all the technical indicators and when they’re returning potentially significant results. It will sweep through them for your symbol and time frame and add them to your chart. In essence, Chart Describer can show you which technical indicators are in play.

For example, it might pull up a stock’s nine-day moving average, its standard deviation channel, or its ParabolicSAR. Chart Describer pulls up whatever technical indicators its analysis reveals as key in the current action.

Select the bold language in the indicator descriptions and a box will pop up with easy explanations. Then slide your cursor back to the far right and select Add studies to chart to see the indicators charted.

Active Trader Ladders (Stephanie Lewicky, Senior Manager, Futures & Forex)

Part of the power of thinkorswim is that it’s fully customizable—you can set it up exactly how you want. Active traders often want a chart, easy access to trade buttons, and a bird’s-eye view of the action. Ladders give you just that.

As the market moves up and down, so does the ladder. It’s like a living metaphor that lets traders “feel” the action. You can also see the volume that’s traded at each price so you know where the action is (or has been). Want to hit the bid or lift the offer? The big green and red buttons are right there (see figure 1). Want to put in a limit order? Hover on any point on the ladder and your default size pops up.

Ladder tool on thinkorswim trading platform
FIGURE 1: SAMPLE ACTIVE TRADER SETUP WITH LADDER. As the market climbs and descends, so does the ladder. Chart source: the thinkorswim platform from TD Ameritrade. For illustrative purposes only.

Conditional Orders (Scott Thompson, Education Coach)

When you’re trading stocks, exchange-traded funds (ETFs), or futures, the basic tool set includes market orders, stop orders, and limit orders. If you trade options, you can certainly use these basic order types if your objectives involve price triggers. But what if you’d like to make an options trade contingent on price action in the underlying security? Conditional orders allow you to do just that.

Suppose you want to buy a call option when a stock breaks out above a particular resistance area. You can set up a trigger using the thinkorswim conditional order “gear” at the far right of the order line. The objective is to catch the breakout momentum of the stock without having to sit at a computer all day watching for when or if it actually happens.

You can set up conditional market, stop, or limit orders depending on your objectives. You can even set up an order based on the “mark” price of whatever you’re trying to trade. But remember: With limit orders, there’s no guarantee the order will fill. Once triggered, market orders compete with other orders and are subject to current market conditions.

Creating, Monitoring, and Adjusting Orders from Charts (Scott Connor, Director, Trader Education)

It’s possible to place trades directly from price charts, which is a bit of a time saver for those who like to keep their eyes glued to a chart. Suppose a stock looks like it’s going to bounce off a support level and you want to place a buy order. Right-click a price anywhere on the chart and choose to buy, sell, buy custom, or sell custom. thinkorswim immediately creates an order based on the price and order type. Of course, you’ll want to make sure the order is accurate, so before placing the trade, you may need to go in and edit the order in the Order Confirmation Dialog. Once the order is placed, the chart will help you keep track of your orders by displaying the number of shares, type of order, and price at which the order was placed (see figure 2).

Setting up trades directly from price charts
FIGURE 2: SETTING UP TRADES FROM CHARTS. Orders placed directly from a chart are displayed on the chart. That can help you monitor your trades and adjust them if things don’t go as you thought they would. Chart source: the thinkorswim platform from TD Ameritrade. For illustrative purposes only.

Seeing the order displayed directly on the chart helps you monitor open positions. If you bought shares at a support level, your exit point could be the next resistance level. So you could place an order to sell at that level. Suppose the price moves quickly toward that resistance level and you want to raise your exit price point. If an order hasn’t been filled yet, simply click and drag the trade to another price level. This cancels and replaces the working order. 

Today’s Options Statistics (Kevin Hincks, Manager, Trader Contributor)

Option traders tend to gravitate to where the action is—certain strike prices and expiration dates, for example—and implied volatility ebbs and flows depending on market conditions. But you don’t need to be an active option trader to get insight from the options data.

Fortunately, it’s all there in one place on thinkorswim under Today’s Options Statistics. Find it under the Trade tab, just below the Option Chain (see figure 3).     

Today's options statistics on thinkorswim
FIGURE 3: SLICING AND DICING THE OPTIONS STATS. Here’s a sampling of the options stats available. Image source: the thinkorswim platform from TD Ameritrade. For illustrative purposes only.

And note: Options stats are available for pretty much all stocks, ETFs, and even futures contracts. 

Implied and historical volatility. How much expected volatility are traders pricing into options right now, and how do these current readings stack up against historical levels from the past year? Check the left side of the stats page.

Trade analysis. The middle section drills down into the dynamics of the day’s options trading—the breakdown of put and call options, plus what percentage of each traded at the bid or below, the offer or above, or between the bid and ask prices. This can offer a glimpse into how aggressive buyers and sellers have been, which could offer a clue to directional sentiment.

Sizzle Index. The right side of the stats page is devoted mostly to Sizzle Index data. The Sizzle Index displays unusual options activity using a ratio of the current volume of a stock and its average daily volume over the last five trading sessions. A Sizzle Index reading greater than 1.0 implies that current volume is greater than it’s been over the last five days. Below 1.0 implies the opposite, and the further a measure is from 1.0, the more the day’s volume has deviated from its daily average.

Put/call ratio. At the bottom right is another important measure of short-term investor sentiment—the put/call ratio (P/C ratio). Remember that breakdown of puts to calls in the trade analysis section? The P/C ratio simply expresses the volume totals as one measure. A ratio of 0.5 implies volume is even between puts and calls. A reading below 0.5 means volume has shaded toward calls. Above 0.5 is, well, you get the picture.  

As any of our pros—and any veteran “swimmer”—would tell you, we’re just scratching the surface here. The thinkorswim platform has hundreds of features: fundamental research, charting tools, order entry and trade management gizmos, and other hidden gems. Want to learn more? Visit our Education page to discover all the opportunities to add to your knowledge. Take a course, tune in to one of the many daily webcasts, or open the Trader TV widget and watch the TD Ameritrade Network. There’s always room for one more thinkorswim pro.

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Key Takeaways

  • The Chart Describer acts like a technical analysis scanner

  • Many active traders use ladders to help them visualize trades and get in and out quickly   

  • You don’t need to be an active option trader to get insight from Today’s Options Statistics

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