Chart analysis tools include indicators, drawing tools and chart pattern recognition. There are countless ways to analyze charts and thinkorswim provides loads of tools for doing so.
Charts and Flexible Grid
Both these charting platforms provide the same analysis tools and can be accessed in the same way. Analysis tools are accessed through the charting toolbar by clicking "Drawing" or "Studies" depending on which type of tool is needed.
Drawing: The Drawing button provides a dropdown menu which allows the trader to select from a number of different drawing tools. Drawing tools overlap the price data and can be used to mark-up the charting area. Drawing tools include Fibonacci Retracements, trendlines, support or resistance (price level) and text notes to list a few. (For related reading, see Top 4 Fibonacci Retracement Mistakes To Avoid.)
Figure 32. Chart Menu - Drawing
To select a drawing tool, click it once. This activates the tool. To "draw" on the chart with the tool, left click once where you want the drawing to begin. Then left click again where you want the drawing to finish. Double click on any drawing to activate it. Activating allows the drawing to be moved or altered. The drawing can also be edited or deleted by right clicking on the drawinga drop-down menu will appear with some options.
Studies: Next to the Drawing button is the Studies button. Clicking on it will bring up a drop down menu providing access to a multitude of studies.
Studies can be accessed in two primary ways through the Studies button. The first method is to hover over the "Quick Study" or "Add Study" options within the menu. This will bring up another drop-down menu. Holding the mouse over any of the sections will bring up available options for that Studies category. (For related reading, see The Pros And Cons Of Automated Trading Systems.)
Figure 33. Studies Drop-Down Menu(s)
After a study has been added, it can be altered by clicking Edit Studies under the Studies button. Clicking on Edit Studies brings up a list of all available technical studies as well as studies which are currently being used. Using the Edit Studies menu is the second way to add studies to the chart. From this menu traders can add, remove or edit studies.
To add a new study select a study from the list on the left, then click "Add Study" at the bottom of that list.
Figure 34. Edit Studies
After a study has been added it will show up in the box on right--"Added Studies and Strategies." Select the appropriate study from the list to be presented with the available editing options.
Studies can be removed by clicking "Remove" along the upper right hand side of the window.
Right Click on Chart: Certain technical analysis features are also available by right clicking on the chart. This will bring up a drop down menu which provides access to many of the same features discussed above.
Prophet charts provide very similar tools to the Charts platform, but those tools are accessed through a different route. The main way studies and drawing tools are added is through the menu and shortcut bars. (For related reading, see Range Bar Charts: A Different View Of The Markets.)
Figure 35. Prophet\'s Analysis Tools Menus
Drawing Tools: Select the tool desired from the dropdown list to apply it to the chart. Once a tool is selected, left click once where the drawing is to begin and again on the spot where the drawing is to end. Patterns: Traders can get the charting platform to find chart patterns for them, including triangles, wedges or head and shoulders patterns. To find patterns click the Patterns button followed by "Find Patterns." Go through all the options and when ready, click "Apply."
Studies: Studies can be added by clicking the Studies button followed by "Apply Studies." Select a study from the list, click add, edit the parameters of that study as required and then click "OK" to add the study to the chart.
Figure 36. Prophet - Apply Studies
Prophet Left-Sidebar: The left sidebar within Prophet charts also provides a multitude of tools. Simply click on the option within the sidebar to open up more options.
Right Click on Chart: Certain technical analysis features are also available by right clicking on the chart. This will bring up a drop down menu that provides access to many of the same features discussed above.
Figure 37. Prophet Sidebar
Guide to TD Ameritrade's Thinkorswim - Trade Management
Financial AdvisorUp to 60 of the questions on this test are case studies. Are you up for the challenge?
InsightsMany of the so-called scientific studies that we read and hear about in the media are nothing but hype and best left ignored.