Thinkorswim Setup Tutorial on FloatChecker

How to Quickly Setup Thinkorswim for Trading

It’s not uncommon to feel completely overwhelmed when you first try to use Thinkorswim to buy and sell stocks. TD Ameritrade’s top trading platform comes loaded with different tools, gadgets, and features. But all of these options mean you can easily customize the software to make it simpler to use. In the following video, Steve with FloatChecker shows you how to quickly setup the Thinkorswim (TOS) desktop version to get you trading fast.

Obviously, we can’t cover all of the features in one video, but below are some popular tools in the TOS Active Trader tab that investors use every day:

  • Charts. TOS allows you to add multiple charts so you can keep track of several stocks at once or display one stock at many different time frames. It’s also easy to customize the appearance of the chart type to move from a line or bar plot to candlesticks. There are hundreds of studies to add, but you can keep things simple at first with just volume. Fortunately the charts are generally easy to read and can be adjusted to any size.
  • Active Trader. This feature comes preloaded with buy and sell buttons to quickly get you up and running. You can of course customize this area to include additional buttons concerning order type, quantities, and position summary. One highlight of the Active Trader tab is the trading ladder. The ladder summarizes a number of useful data points about a stock throughout the day, such as current price, bid and ask sizes, volume at different price levels, and working orders. The trading ladder can also be used to conveniently place stop and limit orders. Once you get the hang of it, the ladder may become your preferred method of making trades.
  • Level II Data. Also known as market depth, Level II shows the current bid and ask prices for a stock. The bid and ask prices are listed in “hundreds” of available shares. So when the bid size column reads “5,” that actually means there are 500 shares available for purchase at that price level. When the ask size reads “10,” then there are 1000 shares available for sale at that price, and so on. As with the trading ladder, you can place orders by clicking on your desired bid or ask price. Many traders like to read the Level II data to get an idea of the supply and demand for a stock at given prices. In some instances, noting the volume of orders on the Level II may alert you to the pressure being placed on the bid and ask prices. Some traders also claim that the sizes of orders can give you an idea of whether the price action is being driven by retail vs. larger institutional traders.
  • Time & Sales. Commonly known as the “tape,” Time and Sales prints the actual time, price, and volume of each transaction for a stock. Time and Sales comes color coded so as a stock is moving up in price it will print green, whereas when a stock is moving down it will print red. Some traders like to note the speed of the tape and volume amounts to get a sense of which direction a stock may go. For example, when the Time & Sales quickly shows long prints in green, that may indicate momentum buying moving the stock price up.
  • News. This tab is pretty much self-explanatory. It provides headlines concerning a stock for the last several months. Outlets include CNBC, PRNewswire, and others. Day traders routinely check the news each morning to get a better understanding of why certain stocks have hit the top of their scanners.
  • Gadget Sidebar. The left sidebar contains a number of different customizable gadgets, such as watchlists, quick quotes and account information. Fortunately the sidebar can be hidden out of view when not in use in order to maximize your available screen space.
  • Application Settings. You may notice a slight delay in price quotes and volume information displayed on your Charts, Active Trader Ladder, Time and Sales, and Level II. To make sure you are getting real-time data, go to the Setup option and choose Application Settings. From there you can change your quote speed to real-time under the System option. Also, under Order Defaults, you can change the default quantity for orders. That will allow you to adjust the quantity buttons you see in your active trader area.