Online stock and option trading brokerage firm thinkorswim ("Think or Swim") is one of several brokers that offers a charting and analysis platform. What makes thinkorswim's software more or less powerful than others?
Thinkorswim Platform Overview
The java-based thinkorswim software is laid out efficiently. The left-hand vertical volume can be customized to display as many or as few tools as desired, including information such as account balances, watchlists, mini charts, broad market information, and even web-based feed of market-related TV and audio.
The horizontal menu across the top of the screen is not customizable, but doesn't need to be. A tabs-based navigation scheme allows users to 'one-click' their way to detailed account information, trade analysis, full-screen charts, news, and even thinkorswim's trading community (where traders can selectively view tips and messages from other traders).
The software itself leaves little - if anything - to be desired in terms of easy access to all trading information.
Thinkorswim Charts
As with most tools built into the thinkorswim trading software, the charting function displays crisp and customizable stock and index charts. In fact, there are two separate charting choices.
The first charting choice is the original thinkorswim tool, which offers overlay drawings such as Fibonacci lines, support and resistance, and most important trading shapes like triangles and rectangles. Technical indicators available include all the major ones like stochastics and MACD, not to mention volatility studies and a handful of tools tweaked by renowned trading experts (Elliott, Fisher, Persons, etc.).
As an alternative, the platform allows its users to use Prophets charts, with a slightly different set of technical indicator choices.
The thinkorswim software also offers a chart-pattern recognition feature
Option Trading at thinkorswim
The thinkorswim software really shines when it comes to option-trade decision making. The 'Analyze' tab merely requires a stock ticker be typed in to automatically display links to all the nearby puts and calls... as many strikes and expirations as desired. From there, various spread strategies (condors, calendars, collars, etc.) can be used to narrow which options are displayed as potential trading candidates.
Once a particular strategy is chosen, that spread/combination can be processed through a risk-assessing profiler, and/or a probability (of profit) analysis. If satisfied with the risk and the odds, the platform's user can then 'one click' even multi-legged option trades.
Paper Trading
As is the case with more and more trading platforms, the thinkorswim platform offers paper (hypothetical) trading to allow traders to practice and test strategies without risking real capital. This platform's version of paper trading, however, can be toggled back and forth between the live version without needing to log out or log in again. And, the hypothetical balance can be 'reset' at any time, and as often as needed.
Cons
- Overwhelming options: Though choices translate into power, newcomers may find it difficult to navigate the platform compared to other, perhaps more-intuitive trading software packages. Self-paced training is available, however. (See below.)
- No fundamental data: While the software was designed for traders more than investors, those who rely on both pieces of the buy/sell puzzle will find Thinkorswim strongly favors technical analysis.
Pros
- Free: Though the caliber of the thinkorswim platform is fee-worthy, the brokerage firm charges no fee for access to the software.
- Training: Live webinars and online walkthroughs/demos can are available to help newcomers get the most out of their thinkorswim package. These offers are detailed enough to lead users to 'platform expert' status fairly quickly.
Suggested Reading
- Review of TradeKing's Stock Trading Platform
- Review of Schwab's StreetSmartPro Software
- Free Online Stock Charting Software
James Brumley - As a former stock broker and analyst, turned writer, James Brumley can tell you what most advisors can't - or won't. His belief is that ...
