Alerts can be set and used for different functions, but most traders use them to be notified when a critical level is being approached in a stock.
Assume that over the last month a stock has bumped into $50 on several occasions, but cannot break above it. You could set an alert at $49.90, which will notify you when this price is reached. The stock can then be watched to see it breaks through $50 - a potential breakout.
Another alternative is to set an alert just beyond the breakout price, $50.15 for example. Using this method, when you receive the alert you know the stock has already broken through resistance and you can trade accordingly.
If the Thinkorswim program is open, you can create alerts which "pop-up" on your screen. The pop-up window will notify you when an alert has been triggered. This is good for day traders or swing traders who are actually sitting at their computers during the trading day.
SEE: Introduction To Swing Trading
Email alerts can also be set up. This means you don't need to be sitting at your computer or have Thinkorswim open in order to receive an alert. When the alert price is triggered, you will receive an email notifying you. If required, you can then log in to Thinkorswim Desktop or access your account online or via smart phone.
Finding stocks and setting up these alerts are the next steps and can be done quickly and easily.
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