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New Trading Strategies for ThinkOrSwim Published

thinkorswim trading strategies

New ThinkOrSwim Trading Strategies Published

I’ve recently posted several strategy scripts to the website that identify quantifiable edges for my fellow traders. These ThinkOrSwim trading strategies can be traded standalone, or tweaked further and customized to fit an individual’s trading style. They can either be used to setup automated trading systems in other platforms, or traded manually within ThinkOrSwim and improved with price action trading principles. My most recent strategies are all listed under the strategies category on the site, and here’s a quick reference list:

Most of these strategies come straight out of Larry Connors and Cesar Alvarez’s book “Short Term Trading Strategies that Work,” and are specifically for trading the SPY, SPX, or ES futures. But these ThinkOrSwim trading strategies may also provide edges on other instruments, and you can test them on whatever symbols you like to trade, to see if they can be applied profitably there as well.

I hope these strategies are as intriguing to you as they were to me, and hopefully they will provide you a more quantifiable way to determine your edge in the market as well.

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Full TMO Relative Strength Set added to the existing Relative Strength Package for Thinkorswim

ROL Rollins TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim

New TMO Relative Strength indicator and strategy set added to the existing Relative Strength set

This is a new approach or strategy that I think is valuable enough to share with everyone on my site. This is the TMO, or True Momentum Oscillator, which you may have seen or heard of previously from Mobius. The plain vanilla TMO is a great indicator in its own right, even by itself. However, I’ve found that by combining it with Relative Strength, the results are truly impressive.

TSLA Tesla TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim
TSLA Tesla TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim

The idea behind this new script is to calculate the TMO for 3 different sources:

  1. The stock itself
  2. A market index symbol such as SPX or /NQ
  3. The relative strength ratio of the stock divided by the index symbol

Then, by comparing the TMO output of each of these sources, we can identify points in time where the stock’s momentum first begins to outperform the overall market early on, while it’s still trading inside a base or pullback pattern.

Thinkorswim Relative Strength TMO True Momentum Oscillator Scanner and Signals Column - Sidebar
Thinkorswim Relative Strength TMO True Momentum Oscillator Scanner and Signals Column – Sidebar

The remarkable thing to me is that this strategy can be broadly profitable on most stocks just using the built-in divergence signals between the 3 TMOs, and no additional filters like MAs or other trend filters.

The other remarkable feature is that this seems to be a timeless source of edge: if many people start using these signals, it will likely create new divergences to take advantage of.

The set comes with a scan, column, 2 indicators, and a strategy for backtesting, and by default it compares the currently-charted stock to the SPX through the lens of the TMO.

This suite of tools is available for free to anyone who has previously purchased the Relative Strength indicator set, and from now on it will also be included for new customers as well.

Click here to get the TMO Relative Strength set for Thinkorswim!

DE John Deere TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim
DE John Deere TMO Relative Strength True Momentum Oscillator Strategy for Thinkorswim
Thinkorswim Relative Strength TMO True Momentum Oscillator Scanner and Signals Column
Thinkorswim Relative Strength TMO True Momentum Oscillator Scanner and Signals Column
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How to Use Thinkorswim: The Ultimate Guide 2021

how to use thinkorswim tutorial for stock trading

Thinkorswim is an electronic trading platform that is provided by TD Ameritrade. You can use it for trading monetary assets. It has been geared toward futures, options, and self-directed stock traders. 

If you want to use Thinkorswim, continue reading for our ultimate guide on using the platform so you can discover everything you need to know about how to use this trading system effectively. 

Using Thinkorswim: How to Make the Most of This Platform

Once you download the Thinkorswim platform, you will notice that there are two chief segments in the working area. You have the main window, which is in the center of the trading station, and then to the left, there is a sidebar. 

The sidebar has a number of different subtabs, which contain relevant details. You can customize the sidebar, meaning you can add a whole host of different gadgets. A few examples of some of the things you will be able to add here include the following:

  • Quick quotes
  • Quick charts
  • Watchlist 
  • Streaming features
  • Calculator
  • Message center
  • Account details

With the main window, you will get the following tabs:

  • Monitor – This is a tab that enables you to keep full track of all of your trading activities, including: open positions, cash balance, statements, and orders.
  • Trade – Via this tab, you will be able to get all of the details about the tradable products that are available on thinkorswim. For every category of product, there is its own interface.
  • Analyze – As you may gather, this is a section whereby you can analyze and backtest both hypothetical and real trading scenarios. You can also take a deeper look at probability analysis, volatility, and economic databases, helping you to make informed decisions when trading. 
  • Scan – Via this tab, you are going to be able to filter through futures, FX, options, and stocks so you can determine which of the instruments offered are right for your criteria. 

There is also the navigation bar on Thinkorswim, which enables you to navigate all of the tabs and subtabs that are available. At first glance, it can look a little bit overwhelming or complicated, especially if you do not have any prior experience in trading. However, once you have had your first few sessions, we’re sure you will start to feel more comfortable with Thinkorswim and it will become a lot more intuitive for you. 

Placing a Trade on Thinkorswim

There are numerous ways you can go about placing a trade order via Thinkorswim. But, what is the best method? Well, it all depends on your preferences really! The order ticket is an easy option for setting up trades if you are not concerned about the speed. All you need to do is select a price and then choose to either sell or buy. 

However, if speed is important and you’re looking to move at a faster pace, you may want to consider the Active Trader Ladder. This boasts a quick approach for you to execute trades on forex, futures, exchange-traded funds, and stocks. 

You also have the option of creating and saving custom order templates, which gives you the ability to automate trading. To do this, you need to head to settings. From the Customize window, choose to select Order Template Selector and Order Template Editor. All you have to do from here is choose your order template prior to placing a trade, so it makes it straightforward.

There are Many Customization Options When Using Thinkorswim

Another reason why Thinkorswim is so popular is that you have the option to customize many different elements of it. From customizing the appearance of the platform to creating and customizing watchlists, there are many different possibilities in this regard. This enables you to make sure that the platform is working for you and that it is fully set-up to suit your needs and requirements.

When trading, it is vital that you keep a watch over the markets for any and all possible opportunities. To do this, you will need to set-up a watchlist. There are a number of different ways that watchlists can be used.

  1. Public Scans or Watchlists

If you want to seek stocks with a specific sort of activity or you are looking to generate trade ideas, it is advisable to use public scans or watchlists. For instance, you may want to look for stocks that are either gapping down or up, percentage changers, and upcoming dividends or earnings. To do this, you simply need to head to the menu that is situated at the top of the watchlist gadget.

  1. Custom Watchlists

Alternatively, you have the option of creating your own custom watchlists, meaning you can track your unique interests. This is something that a lot of people tend to do once they become more experienced and more accustomed to the platform. 

  1. Link Watchlists to Chart

You also have the option of linking your watchlists to a chart. You are able to scroll through every symbol on your watchlist. This is an excellent way of efficiently seeing the chart of every symbol on your watchlist. Therefore, if you have a number of moving averages displayed on your chart and you are trying to find a moving average crossover, you will be able to efficiently scroll through the charts of every symbol on your watchlist to see if there is any sort of crossover. 

*To open or create a watchlist, choose the Add Gadget option, which is the plus sign button. You will find this on the left sidebar at the bottom. After this, simply choose Watchlist. For a specific list, the menu along the top will be able to help you with this.

Final words

With so many features and resources on the Thinkorswim, you may find the platform to be a little bit overwhelming when using it for the first time. However, the developers and designers have certainly done an incredible job when it comes to fitting as many features and elements into Thinkorswim as possible! There are also plenty of great resources and educational articles that are available should you find yourself getting a little bit stuck.
Want to be a top trader using Thinkorswim? Click here to learn more.

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Using Thinkorswim Web to Learn Paper Trading for Free

thinkorswim papermoney simulator for demo trading

If you want to get involved in the world of trading, paper trading is a great way to start off! For those who are unaware, paper trading involves simulated trades, which enable an investor to practice selling and buying without real money being risked. The term “paper trading” dates back to a time whereby those who wanted to become traders would practice on paper before they risked money in live markets.

Practice with paper trading

While you are learning, you will record all of the trades so you can keep track of the losses, profits, portfolios, and hypothetical trading positions. This will help to make sure that you are more prepared when the time comes to trade with your own funds. Today, a lot of the practice trading incorporates using an electronic stock market simulator, which feels and appears like a genuine trading platform.

What are the benefits of paper trading?

There are a number of different benefits associated with paper trading. Here are the top benefits:

  • You will get to practice every part of the trading process.
  • You practice in a relaxed environment without putting your own money at risk. 
  • This can also give you confidence in your ability. 
  • If you make mistakes, you can keep practicing until you feel like you are ready. 
  • Paper trading gives you the ability to test out new strategies and try different things. 
  • With no stress and no risk, it makes sense to try out your investing thoughts and strategies with paper money rather than diving right in and risking your own money. 

However, you do need to be disciplined; only make the moves you would on a real platform so you can be sure you’re truly testing your efforts. 

You can paper trade for free on thinkorswim 

One trade platform that comes with the option of paper trading is thinkorswim. Thinkorswim has a great reputation in the industry for being one of the best electronic trading platforms, and so it is certainly ideal to start off here when it comes to your trading efforts. 

How do you paper trade on thinkorswim?

It is really easy to get started with paper trading on Thinkorswim. Should you already have a TD Ameritrade account, you will automatically be registered for their paperMoney option, which enables you to practice trading immediately. So, all you would need to do is log-in and download the platform.

If you do not have a TD Ameritrade account, don’t worry; you can still try your hand at paper trading. You will simply need to register, which includes filling in your details to set-up your paperMoney account. It is not a complicated process, so you should be able to get started pretty quickly! 

So there you have it; an insight into paper trading with the Thinkorswim platform. We hope that this has helped you to get a better understanding of how you can effectively practice your trades before you commit any of your real funds. This is something that is recommended for anyone who is looking to get a foot into the world of trading. 

Want to trade paper money risk-free? Click here to learn more.