1. Use Trade Alerts To Capture Big Moves With Thinkorswim - Introduction
  2. Use Trade Alerts To Capture Big Moves With Thinkorswim - Alerts
  3. Use Trade Alerts To Capture Big Moves With Thinkorswim - Finding The Right Stocks
  4. Use Trade Alerts To Capture Big Moves With Thinkorswim - Creating The Alert
  5. Use Trade Alerts To Capture Big Moves With Thinkorswim - Conclusion

Finding the Right Stocks
Finding the next explosive stock is not easy, but finding stocks with breakout potential or at least some profit potential are everywhere. There are many methods for finding stocks ready to move (or already on the move), which include chart patterns, candlestick patterns, trendline breaks or indicator levels.

Take a triangle chart pattern for example. As the price converges, giving the price action a triangle-like appearance, you can determine when the breakout will occur and thus set an alert so you are notified when it occurs or if it is close to occurring.

Setting an alert does not mean you need to trade but simply keeps you aware of possible trade candidates.

Alerts can also be adjusted, and may need to be, in order to provide a timely signal. If the alert is based on a trendline, the intersection point of that trendline changes continually as the lines slope. Therefore, if an alert is set to warn a trader of a potential trendline break, this alert will need to be adjusted as the days go by (or bars, if day trading) and the breakout price changes.

However, alerts need not only be used for getting into trades. They can also help you get out of trades. While using stops is recommended on trades, many traders use mental stops and exit trades manually when conditions turn against them.

SEE: Analyzing Chart Patterns: Introduction

The example below shows how alerts can be used to aid in the entry and exit of a position. Microsoft had been in a downtrend in 2011; an alert could have been set to signal when that downward trend had been broken. This is marked on the chart "Trade Alert to Buy."

The ensuing aggressive rally created another steeply sloping upward trendline. An alert could be set so that when the trendline is broken to the downside, an alert is received and an exit trade can be considered (marked as "Trade Alert to Sell" on Figure 1).

Figure 1. Microsoft Corp. (Nasdaq:MSFT) Daily Chart. Source: Thinkorswim


Use Trade Alerts To Capture Big Moves With Thinkorswim - Creating The Alert

Related Articles
  1. Trading

    Use Trade Alerts To Capture Big Moves With Thinkorswim - Creating The Alert

    Whether sifting through charts or running a stock screener (also available in Thinkorswim via the Scan tab), inevitably the alert function will come in handy. One of the easiest ways to set ...
  2. Trading

    Use Trade Alerts To Capture Big Moves With Thinkorswim - Conclusion

    Alerts are a great way to stay on top of emerging trends and potential breakouts. They can also be used to warn of reversals and moves to the downside. Once a stock is on your radar, pull up ...
  3. Trading

    Intermediate Guide To MetaTrader 4 - Alerts

    Alerts can be created to provide signals about events in the market. Creating AlertsTo create an alert, begin by opening the Terminal pane by pressing CTRL + T on the keyboard, or in the Main ...
  4. Personal Finance

    Will the Global Terror Threat Sink Airline Stocks?

    A climate of security threats has led the State Department to issue a global travel warning, and airlines are feeling the pain. How have past alerts affected airline stocks?
  5. Trading

    Use Trade Alerts To Capture Big Moves With Thinkorswim - Introduction

    One thing that can really annoy a trader is missing a big move. You see a pattern or trade set-up you like and tell yourself you will keep an eye on it. Upon later revisiting it, you see that ...
  6. Trading

    The Utility Of Trendlines

    Trendlines give an investor a good idea of the direction an investment might move in. Discover how to make them work for your portfolio.
  7. Markets

    Watch for Short-term Trendline Breaks in These Stocks (MDLZ, VLO)

    When these short-term trendlines break, the recent rally in these stocks is likely over.
  8. Trading

    Introduction To Technical Analysis Price Patterns

    To "find your game" in technical analysis, you need to be able to recognize reversals and continuations as they form.
  9. Trading

    Tales From The Trenches: Volume Confirmed Broadening Pattern

    Find out how to make sense of this tricky - but profitable - formation.
  10. Markets

    Stock Breakouts Happening Now or Imminent (XRAY, AMX)

    These stock are breaking out--or close to breaking out--of chart patterns, likely signaling the direction of the next trending move.
Trading Center