How to Trade on ThinkOrSwim – SIMPLIFIED

In this video, I go over the basics of TD Ameritrade's ThinkorSwim platform for trading stocks and options. This should help you get an idea of the layout, tools, and ways to optimize it for your trading style.

ThinkOrSwim Setup

If you’ve finally decided to switch from your crappy broker to a better one – congratulations! I made the switch from Robinhood about one year ago over to TD Ameritrade so I can use their ThinkOrSwim trading platform. I thought it may be helpful to cover some things I’ve learned with the platform to help you get off on the right track.

I did my first live stream on this channel back on Monday where I was going over some of my positions and answering questions in the chat – and one question that came up over and over was asking which platform I was using. So I thought it might be helpful to go over ThinkOrSwim since it can be daunting when you first launch it.

The Downsides

A lot of people like using ThinkOrSwim for charting and trading, especially with options, and while it’s definitely better than something like Robinhood, it’s certainly not perfect. First, it’s open mainly to US citizens. There may be some exceptions, but if you live in other countries, you probably need to find another broker. I know some people in other countries use Interactive Brokers, so that may be worth looking into.

Other downsides of ThinkOrSwim are sometimes it can be laggy and sometimes you won’t get the best order fills. But in my experience, it’s generally been a pretty good place to trade. I have noticed my order fills have been slower the last couple of weeks, so I actually did open an account for day trading with Interactive Brokers to try that out, but I still have most of my capital here in ThinkOrSwim.

Getting Started

I’m going to assume you’ve opened an account with TD Ameritrade, so let’s start by downloading and installing the desktop version of ThinkOrSwim, since that is the full-featured version that you’ll want to use for most trading.

Once it’s installed and you launch the app, go ahead and log in.

If you want to paper trade, you can flip the switch to log in to your demo account.

Next, you have to agree to their terms and conditions, and then you’re in.

I’m going to flip privacy mode on by clicking the arrow right by Option Buying Power to hide my wife’s account info.

So this is the default home page and honestly, I never look at it. But one thing to note is at the top you want to make sure that it says Realtime Data… not delayed. If it says delayed, you need to log in on their website and turn on Realtime Data.

Okay, so the top left box has all of your account info.

Below that, we have gadgets. These are just widgets that allow you to customize your layout. You can choose from a variety of things… like adding a chart… a notepad… or even minesweeper if it’s a slow market day.

I like to leave it as Live News.

Below that is trader tv which allows you to watch their network or CNBC. Below that is a watch list of stocks so at a glance, you can see what’s going on with some of your favorite tickers. Below that is a quick chart which allows you to type in a ticker and pull up a chart… quickly.

One thing I want to point out here is the yellow number 2s on these gadgets. This is their linking system which will link the different gadgets and windows together. So for instance, the watchlist and quick chart are both linked by the yellow 2 so if I click on a ticker on my watchlist, it will automatically load it up in the chart. We can then link news to these as well.

Now our news gadget is only showing news for whichever ticker is currently active with our yellow 2 link.

So if I switch to Tesla on my watchlist, the chart and news now switch to Tesla as well.

MONITOR

Now let’s move on to the Monitor tab. The Activity and Positions will show you your current positions you have opened that day and positions you are still currently holding. The other tab I’ll look at here is my account statement. This gives you a rundown of all trades you made, and you can look back at your trading history over time. This is a pretty new account, so not much to show here. Let’s head back to the Activity and Positions tab.

You can flip open your working orders and filled and canceled orders you’ve had that day.. If you’ve had any. We can flip open an open position to see more details about it. Here, among other positions, we can see we have 10 call contracts on AT&T. The trade price column shows you what you paid for them and the mark shows you where the price is currently for that contract or equity. P/L Open shows you your current profit and loss for your open trades, P/L Day shows you your profit and loss for the day.

If you want to close a position, one of the ways you can do so is by right-clicking your position and going to Create Closing Order… then Sell. This will take you to the trade tab and at the bottom, we have our Order Entry.

This is a pretty standard order entry box, but we can see we’re selling a quantity of 10, the symbol is T for AT&T, and then we have the details of the contract.

They automatically fill in the price with the going rate, but if we want to try and sell for a higher price, we can adjust that here.

We can leave the order type as LIMIT, or we can adjust it if we want. Day means if the order doesn’t fill by the end of market close, it will automatically cancel it. We can change that to GTC or good til canceled which will keep the order open until it fills or until we cancel it. Then we can click Confirm and Send which will pull up a box just ensuring the details are correct. We can see our Max Profit of $320. We see a Max Loss of infinite… which I never understand why they do this because ….

Then we can click send. It’ll notify us in the top left of our screen when the order fills.

Another thing to note with our trade tab is the red 1 at the top. This can also be linked with other windows and gadgets, so if we change this to yellow 2 to link with our left-hand column of gadgets, we can see it’s now loaded up the Option Chain for Tesla.

We can flip open March 19th to take a look at the different contracts. By default, it’s just showing us 4 strike prices, which for a stock like Tesla, isn’t a lot. So we can change this to show more or even all of the strikes available.

The left hand side are calls and the right hand side are puts. The strike and date are in the middle. To buy a call or a put, select your strike, then click on the ask. This loads up our order entry box at the bottom. Now we can select the quantity of contracts and then we can adjust the price. We can see in our columns there is about a 15 cent difference between the bid and the ask which is not bad at all. If we want to try and get an order filled closer to the middle of the bid and the ask, we can drag this slider down to mid… or just type in the price manually. Once we’re happy with everything, we can click Confirm and Send.

You can also see what options contracts are being bought and sold by opening up the Options Time & Sales tab… you can also look at statistics for options as well. And lastly, I want to mention the Implied Volatility on Options Chains. We can see Tesla March 19th has 74.31$ implied volatility, and the number in the parenthetical shows that the options are pricing a move of plus or minus $28. We can see implied volatility, and the expected move changes the farther out in time we go with the contracts.

Then you have a few other tabs in the trade panel like Forex, Futures, and Active.

Before we get too far along, I’m going to switch over to my account, so I can show you my setup.

Let’s skip over to the Charts tab. Here is where I spend most of my time. Again, here we can link our chart with our left-hand column and our Trade tab. The top right will allow you to customize your chart, add indicators, and a whole lot of other stuff.

Let’s say you want to add a study – like an Exponential Moving Average. Go to Studies > Edit Studies.

Here, we have all of the studies built into the platform. I’m just going to start typing M-O-V A-V-G and double-click on moving average exponential. This adds it to the chart in the Price section, so the study will show in the same spot as our candlesticks which is what we want. We can click apply to see it take affect.

But what if we want a 50EMA, not the default 9, and we want it to be yellow and not cyan? Well, just click the gear, and under length change 9 to 50. Then, you can change the color to yellow… and hit Okay. Then we can hit apply to see it update on the chart.

If we want the 50 EMA and the 9, I can just add another EMA study by double-clicking it… and this time I’ll leave it at the default values... and clicking apply, we can see it update. Feel free to add whatever studies or indicators you’d like… I usually like to add VWAP so let’s type that in… change the color… and hit Apply. By default though, VWAP also shows us 2 standard deviations up and down for a total of three lines on the chart. That makes it too messy for me, so I’ll just edit the study, and for the upper band and lower band, I’ll deselect Show Plot.

Now we can hit Ok.

To the left of Studies, We have our Drawings menu. Instead of using this menu, I prefer clicking my scroll wheel in to quickly access the drawing tools. The one I use most is the Price Line Tool.

You can right-click on your drawing to change the properties like the color or add a text label to it.

When the drawing is no longer useful, you can right-click and choose Remove Drawing.

In the Style menu, you can change the type of candlesticks and other aspects of your chart’s appearance. Perhaps the most useful thing here is being able to save your chart setup, including the time frame and studies.

So if this is the setup I like for swing trading, I could save this as my Swing Trading Setup and click the box to include patterns and study set.

To the left of Style is the Time Frame of the chart. You can flip between different time frames to get a better idea of the price history and notable levels. You can also add a custom time frame if you need to. Just click Customize List and then Add Time Frame…

Next on our chart menu is quick access to our chart settings with the gear icon. You can adjust settings like snapping your drawing tools to ticks on the chart… or over in the time axis, I like to add room on the right of my chart by increasing the expansion area to 50.

We then have the Time Frames which we just looked at, appearance of our candles, and then in Equities you can choose to turn on or off Extended hours trading sessions.

That’s about all I adjust there.

Now on the right, we have these buttons to activate different features. If you quickly want to place a trade, you can click the Trade Button.

Here you have a simple order entry to buy shares. If you have the Auto Send box checked, it will skip the confirmation screen and just go straight to filling your order.

Just click the Trade button to close it.

Times and Sales shows you real-time orders coming through and the volume of the order.

The Active Trader tab is great for day trading. Not only can you quickly change your order quantity, but you can also set up bracket orders which will set your limit sell and stop-loss for you based off when you want to take profit or cut losses. Here’s a template I made. If you just want a limit order to take profit and no stop-loss, you can deselect the stop-loss. You can place the order by pressing the buy or sell market buttons or by clicking on the bid size to buy or ask size to sell on the price ladder.

The last notable button here is Level II. This pulls up level 2 data showing limit orders. Buy orders are on the left and sells are on the right. BS is the bid size, or the size of the buy order. AS is the ask size or the size of the sell order. Just multiply the number you see by 100, since each number represents 100 shares.

So here is a buy order of 100 shares at $202.70. And here is a sell order of 300 shares at $206.

So those are the buttons on the right side of your chart. Then above the patterns menu, is your grid layout. If you want your main chart view to have 4 charts instead of one, you can do that.

Above that you have your overall application settings for ThinkOrSwim. You can adjust things like the color scheme, notifications, and order defaults.

For example, my order default for an options order is 2, so when I go to place a trade, the quantity is automatically set to 2 since I often buy 2 contracts at a time.

So that’s a pretty broad overview. There’s still way more to this application, but I don’t want to overwhelm you with too much – instead just focus on the things you’ll likely use most. There are other things like the market visualizer… so you can flip through different indices and see… well it looks like the financial sector is the only one having a good day in the market today.

One other thing I often do is set alerts for key levels of a stock. So If I want to buy Gamestop when it comes down to $172, I can right-click, and set an alert to notify when Gamestop drops below $175 so I can be paying attention when it comes close to that level.

Okay, now that you have an idea of how to get around, let me show you how I have things setup. If you have multiple monitors or just want to have different tabs open at once instead of flipping to your trade tab then your monitor tab and then back to your charts, you can simply detach any window which will duplicate it and allow you to customize things.

So this setup I actually learned about from another YouTuber named Vincent Desiano, so shoutout to him and his channel for the good idea. Basically, I take my trade tab and detach it. Then I can resize it and move it over. Then I detach the chart tab. I turn on Active Trader and turn off my chart.

Then I’ll click the gear button to the right of my buy and sell buttons. I’m going to add Buy Ask and remove Buy Market and Sell Market. And then I’ll add Sell Bid. Then I’ll just resize it and move it to the top right.

Now I’ll just link the trade window to yellow 2… but make the active trader window link to blue 3. If I want to quickly buy or sell an options position, I just load up the contract by right-clicking it… Choose Send GME to Blue 3.

Now that call contract is loaded up in active trader, and I can quickly buy and sell. It’s worth noting that generally you want to buy a contract in between the bid and the ask to get a better position. You don’t want to use this on contracts with big spreads where you will lose a lot of money by buying the ask and selling the bid. I would only do this to get in and out as quickly as possible, knowing my profit will cover the slippage.

And then I did finally add a second monitor that’s oriented vertically because my desk isn’t big enough otherwise. I have this loaded up with 8 charts for companies I have positions in or am otherwise keeping my eye on. And then below that is my monitor tab with my open positions. It’s a pretty red day for these swing trades.. So uhh.. Don’t judge.

But I used to have to flip through charts one at a time and then switch to the trade tab and then the monitor tab and then back to the charts, so I like this layout much, much better.

So that’s how my ThinkOrSwim platform is setup and, hopefully, this gave you some ideas on how to better configure it for your needs.

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