- Ease of Use
- Level 2
- Order Execution
ThinkOrSwim is a trading platform provided by TD Ameritrade. The platform is free for Ameritrade customers and offers a wide range of features, including charts, level 2, scanners, watch lists, and more. The platform also offers the option to choose between live trading or paper trading.
Ameritrade has really ramped up its trading platform Think or Swim (TOS) to better serve the active trader demographic. TOS is their advanced level standalone platform for serious traders. It has all the bells and whistles covering everything from stocks, options, mutual funds, futures, commodities and Forex in one platform. It also has a rich diverse group of research providers, training and educational content suitable for new and intermediate level traders.
Stocks and exchanged-traded-funds (ETFs) are charged a flat rate of $6.95 per trade when done electronically through the platform. Options are $6.95 + $0.75 per contract. If you use a live broker to place the trades on stocks and ETFs, they charge $44.99 fee. No-load mutual funds are charge $49.99 fee. Futures are $2.25 per contract + plus exchange and regulatory fees. The minimum deposit is $2,000 for a margin account. There are no monthly software, maintenance or activity fees.
ThinkOrSwim Platform Features
The TOS platform is composed of various tabs at the top: Monitor, Trade, Analyze, Scan, Marketwatch, Charts, Tools and Help. When you click the Charts tab, it provides a layout of windows that can be customized based on the side buttons including: News, L2 (Level 2), Chart, Buttons, Active Trader, T&S (Time and Sales) and Trade. By selecting any number of buttons you can customize the window to include the tools you need. You can also size the window as large or small as you wish.
The TOS charts are very versatile. Traders can use traditional bar, line and candlesticks for charting. TOS also has less conventional charting using Heikin Ashi and Equivolume charts. Charts can also be linked by color code to other windows. This makes it convenient when shifting between different stocks on multiple time frames. Personally, I like to have linked windows with a 1-minute, 5-minute and 15-minute chart, which gives me a wider perspective of the short-term price action. Whenever I change the symbol, it updates the data simultaneously across all linked windows. Initially, I got annoyed whenever I changed a symbol, the updated charts would be compressed and require manually expanding them to be readable. Here is major tip to solve this issue. Go to Chart Settings and Click Time axis and make sure “Keep time zoom” is checked on. This will allow any new symbols to be updated on a beautifully refreshed readable chart.
TOS has more technical studies and indicators that you could ever use. They are arranged by category like momentum studies, moving average studies, trend studies to specific customized studies of gurus like John Carter’s studies or John Person’s studies. TOS does a great job of addiing studies and the selection keeps growing. I really like the Bearish-only and Bullish-only candlestick pattern studies, which identifies when a selected pattern forms. However, you have to vet them out to see if they are truly valid. For example, hammer candles can form during a consolidation but aren’t truly effective unless preceded by at least four red candles.
The level 2 is basic and shows the major exchanges and ECNs. Unfortunately, there is no subscription currently to the NYSE Open book or Nasdaq Totalview feeds. On the flip side, the level 2 is free, so no complaints there from me.
The newsfeed is useful when looking for information pertaining to specific stocks. It updates realtime and is good for momentum traders that jump on news-related price action.
The scanner can be configured based on fundamental or technical criteria. It is versatile and effective for finding ideas and potential trades. The options scanner is a great tool to find options trades that meet certain set-up criteria.
TOS has basic order entry buttons using point-and-click on the Level 2 for pricing selection not routing. Traders can also opt to use a vertical DOM matrix to place orders. TOS doesn’t allow direct order routing and instead uses it’s own algorithms to fill orders through their own dark pool. This can make for some tough transparency on fills. This can be frustrating for momentum traders, but it’s always important to stick to limit orders.
The platform lets you place price or indicator based alerts, which makes it much easier to concentrate on the set-ups currently on your plate and not worry about monitoring what hasn’t triggered yet.
TOS has preprogrammed watch lists with gappers/dumpers, new highs/lows and stocks trading at specified volume and price change levels. It also has watchlist windows that I can add my own watchlist stocks and have them linked to my charts. Watchlist settings are configurable as are most things on this platform.
TOS was originally an independent options trading platform before Ameritrade purchased them. The analyzers, calculators and tools for options trading are second to none. Traders can decide what type of strategy they want to partake to see what kind of profits or losses are possible. TOS will execute multiple legs options strategies after reviewing them first through their options strategy analyzer. This is the best platform for anyone who trades options.
Users can draw trend lines and also plot Fibonnacci retracements, which are two of my favorite price action tools. There are a ton of educational tutorials, webcasts and course content.
Ameritrade and TOS have a vast library of videos and tools to get you acclimated. The interactive courses do a good job for self-directed traders to get all the tips and techniques needed to smoothly navigate through the platform. There is also the Education Center which has online courses that new traders or investors can use to learn about different topics including stocks, options, futures, technical analysis, with access to courses, podcasts and webinars.
Ameritrade TOS provides a community chatroom with hundreds of traders of all experiences and skills. There are definitely some good traders in there but I never trust free chatrooms. Honestly, it is a mosh pit of comments with traders trying to hype their own positions. Without any guided alerts or signals, it’s pretty messy in there and I don’t hang out there often.
Customization and Saved Layouts
You can save your layouts and also post them up for others to use or to share with friends who also use TOS. The layouts are saved on the cloud so you can use them on different computers and devices, which I found convenient. There are a number of other features that the thinkOnDemand which lets you replay the market during past time periods to better train yourself and tweak your tools. The API is also programmable which lets computer-saavy traders program in their own indicators or tweak existing ones.
The Think or Swim platform is one of the best trading platforms on the market. They provide so many tools it can become overwhelming. It is prudent to have multiple desktop monitors to truly utilize the full range of tools in the software. While the free software and data is generous, the lack of direct order routing and relying solely on the in-house darkpool can result in some frustrating fills. Still, TOS is one of the best trading platforms out there. Anyone can sign up and try the demo for absolutely free.
What Type of Trader is ThinkorSwim Best For?
Think or Swim originally started as an independent options trading platform before Ameritrade acquired them. Options traders will probably get the most benefits out of this platform. The options analytics and calculators are very convenient and really simplify the expected returns on basic and complex options strategies including spreads, straddles and condors.
Self-directed nvestors will also have a field day with all the fundamental tools and videos. As complicated as the platform may appear, it is really catered to the new trader who doesn’t care about pass-thru rebates or order routing. At $6.95 a trade through TD Ameritrade, this can be expensive for traders that like to scale in and out of positions in 100-300 share increments at a time. For the newbie traders, this is a good value with all the extra education perks that come with the platform.
Active intra-day traders will find the expensive per-trade commissions and lack of direct access routing to be cost prohibitive. The lack of direct-access also means no pass-thru rebates, which active traders rely on to lower commission costs.These traders may prefer a day trading broker. However, very large position traders will find that unlimited sizing on the flat rate trade commissions to be more cost effective, provided they use strict limit orders on fills.
Is the Platform a Good Value?
TOS a jack-of-all-trades, which is very versatile for portfolio trading and management, but can spread thin in areas requiring deeper concentration like direct order routing. The best part of the platform is that it is absolutely free to test out in “paper money” mode, which is their demo mode. The platform itself doesn’t cost extra, which is an amazing value, especially since the quote and news feeds are included in the demo. As I mentioned before, I can’t help the feeling that there is a little too much focus on cosmetic enhancements and not enough focus on what active stock market traders may need like per-share pricing, ECN rebates and direct access order routing.
- Free software and data feeds
- No monthly maintenance or inactivity feeds
- Easy to learn platform
- Massive amounts of tools, studies and educational content
- Always improving with upgrades
- Multi-market trading platform
- Great for skilled options traders, investors, intra-day and portfolio traders
- No direct-access routing
- Expensive per-trade commissions of $6.95 bad for scaling in and out
- Can be a big resource hog