Thinkorswim Review
  • Charts
  • Level 2
  • Scanners
  • Features
  • Value
4.2

Summary

TD Ameritrade’s Thinkorswim is not only a desktop trading platform that includes numerous tools, it is also free to all TD Ameritrade customers. Thinkorswim offers many features that active day traders look for including level 2 data, stock scanners, and more. Read our review to find out everything you need to know about Thinkorswim.

What is Thinkorswim

TD Ameritrade’s thinkorswim is an advanced desktop trading platform that is, almost unbelievably, available to all TD Ameritrade customers for free. The trading platform includes many of the tools that active day traders need to operate, including real-time price data, charts and technical studies, level 2 data, stock scanners and alerts. Even better, thinkorswim allows users to place trades with TD Ameritrade directly from the platform to enable faster action in quickly moving markets.

Thinkorswim Pricing Options

The thinkorswim platform is available for free to all TD Ameritrade brokerage account customers, regardless of how many trades are placed or the account balance – an incredible offer given that the tools provided in the software are considered premium by most other brokerages or are available only in paid software applications. The platform allows users to place trades through TD Ameritrade, which has relatively high $6.95 per trade commissions.

Features of Thinkorswim

Charts

One of the main screens of thinkorswim is the charting window, which allows traders to investigate individual securities using a variety of different methods. In addition to the standard candlestick charts, thinkorswim can plot bars, monkey bars, area charts, and equivolume charts for more advanced visualizations. It is straightforward to display multiple charts – either for different securities or different timeframes – on a single screen and keeping track of charts is made easier by the ability to color code charts in concordance with a list of securities.

Thinkorswim Charts

Technical Analyses

The real power of thinkorswim comes in its ability to apply technical studies on top of the already versatile charts. There are wider variety of technical indicators, drawings, and analyses than most traders will ever use, all of which are easy to customize thanks to the pop-up windows that allow customization of all the parameters involved in a calculation. These studies can be added to a plot, either on top of the candlesticks (e.g. in the case of moving averages) or as a separate sub-plot below the primary charting window (e.g. in the case of MACD). In addition, custom indicators for crossover events can be added to the charting window by checking the signal boxes and customizing the marker styles.

Thinkorswim Studies

Thinkorswim Technical Studies on Charts

An additional advantage of thinkorswim is that it is possible to define custom studies, either by modifying an existing study or by writing a set of parameters from scratch using the software’s custom programming language. These custom studies can be saved and called up to display on charts or to use in the stock scanner during future sessions.

Level 2

The level 2 data within thinkorswim is relatively basic and limited to the major exchanges and ECNs, but free – another major advantage of thinkorswim over other trading platforms that charge extra for level 2 data. It is worth noting that there is currently no access to the NYSE Open Book or Nasdaq Totalview.

Thinkorswim Level 2 Data

News

The news feed within thinkorswim is, like the level 2 data, intended to be basic but helpful. The news window lists headlines in real-time and individual stories can be expanded into a new window with a simple click. However, the volume of headlines is relatively limited and is not on par with services designed specifically for delivering stock news.

Scanners

The scanners are another powerful function of thinkorswim that, along with the charts and technical studies, make this one of the best free trading software platforms for advanced traders. The scanner window allows traders to sort stocks according to multiple fundamentals as well as to set many of the same technical studies that are available in the charting windows, including any custom user-defined studies. Multiple scans can also be intersected to scan in incremental steps with additional parameters. Overall, the scanner is extremely versatile and there are few parameters that cannot be used to include or exclude securities from a search.

Thinkorswim Scanner

Order Entry

Order entry is straightforward by clicking on the prices listed in the level 2 data window or in a vertical depth of market matrix. However, thinkorswim does not route orders directly, rather using its own algorithms to pool orders, so understanding how orders are filled can be somewhat difficult when placing trades through the software and can be frustrating for momentum traders who need this information.

Alerts

The platform has an alerts window that allows users to set alerts, based on prices or specific technical indicators, for individual securities. These alerts can come in the form of either a sound, pop-up, or text message to a connected mobile phone. Although simple to set up, these alerts make a big difference in being able to focus on the trades currently happening rather than worrying about keeping an eye on securities that have not triggered an entry or exit position yet.

Thinkorswim Alerts

Watch Lists

Like alerts, watch lists are easy to set up and can be used in tandem with the scanner to find potential trades. Thinkorswim has a large variety of pre-defined watch lists as well as allows users to define multiple watch lists, which can be saved for future sessions. Watch list settings are highly customizable and watch lists update in real-time with the rest of the data on the platform.

Options Trading

Thinkorswim is arguably the single best trading platform available to options traders thanks to the many analyzers and calculators available for options. The options window allows for screening based on a number of parameters, including strike price, expiration type, and puts versus calls, as well as allows traders to explore different strategies to explore profit and loss scenarios.

Thinkorswim Options

Additional Features

Thinkorswim has a large community, which makes it relatively easy to find answers to any questions that arise about the program. The platform itself also has a large education component with detailed tutorials about all of the windows and options for customization using the built-in programming language.

Customization and Saved Layouts

Thinkorswim is customizable to an almost dizzying degree. The charts are fully customizable in terms of time frames, the technical analyses displayed, color coding, and even the bar styles. It is straightforward to apply multiple technical analyses in tandem and to define custom analyses – which can be saved for future use – using the built-in programming language. Almost all custom scans, watchlists, and alerts can be saved for future sessions, as can custom visual layouts of the many windows. Furthermore, these layouts can be shared with other thinkorswim users.

Compatible Brokers

Thinkorswim is only compatible with TD Ameritrade and a brokerage account with that firm is required in order to download the software.

Thinkorswim Platform Differentiators

There are few features that are unique to thinkorswim, but thinkorswim stands out for being a completely free software that provides advanced charting and technical analysis features, options chain analyzers, and level 2 data. The amount of data provided within thinkorswim is staggering and the nearly unlimited visualizations makes it imperative to have multiple monitors to take full advantage of the platform. The main downside to thinkorswim is trading within the platform, which is subject to TD Ameritrade’s high commission fees and makes tracking order routing extraordinarily opaque compared to other platforms.

What Type of Trader is Thinkorswim for?

Thinkorswim was designed with all of the tools necessary for advanced day traders. While thinkorswim is suitable for traders who place high volumes of trades, the opacity in order routing and the high commission fees of TD Ameritrade make it less desirable for placing trades compared to the platforms provided by other brokers. However, the tools provided can be used to inform trades placed with any brokerage if lost seconds will not make or break a trading strategy. Arguably, thinkorswim is most suited for options traders thanks to the abundance of filters, calculators, and analyzers for trading options. It is also worth noting that TD Ameritrade has a relatively minimal list of potential shorts, which makes it difficult to use thinkorswim for these positions – however, the technical tools within the software are excellent for identifying potential short positions.

Pros and Cons

Pros

  • Free real-time price data, including level 2 data
  • Extraordinarily versatile charting tools
  • Includes a huge array of pre-defined technical studies and watchlists
  • Allows users to define custom technical analyses using the built-in programming language
  • High-quality options analyzers and calculators for assessing strategies and potential options trades

Cons

  • Trades can only be placed through TD Ameritrade, which has relatively high commissions
  • No direct-access routing, which can frustrate momentum traders
  • Requires a large amount of RAM, which makes it difficult to run other trading software simultaneously