Thinkorswim Guide: Paper Trading, Charts & Key Features

What Is thinkorswim?

thinkorswim (often abbreviated as TOS) is an advanced trading platform originally developed by thinkorswim Group, acquired by TD Ameritrade in 2009, and now part of Charles Schwab following the TD Ameritrade merger. It is widely considered one of the most powerful trading platforms available to retail traders, offering tools that rival institutional platforms at no additional cost.

The platform is available as a desktop application (Windows and Mac), a web-based version, and a mobile app. The desktop version is the most feature-rich and is the focus of most serious traders. It provides advanced charting, Level 2 market data, options analysis, stock screening, and a complete paper trading environment.

For active day traders, thinkorswim is particularly valued for its customizable workspace, robust charting engine, and the ability to execute complex orders quickly. For beginners willing to invest time in learning the platform, it provides everything needed to grow from novice to professional-level trading without ever switching platforms.

Setting Up thinkorswim for Day Trading

Configuring thinkorswim properly is essential because the platform's default settings are designed for general use, not optimized for active day trading.

Download and install the desktop application from the Schwab/thinkorswim website. Create a Schwab brokerage account if you do not have one. You can start with a paper trading account (paperMoney) to practice without risking real money.

Workspace setup: Create a custom workspace with these essential windows:

• Charts — Your primary analysis window. Set up 2-4 chart windows for different timeframes (1-min, 5-min, daily) or different stocks
• Level 2 / Active Trader — Shows the order book with bid/ask depth and allows one-click order entry
• Watchlist — Your daily stock watchlist with customizable columns (last price, change %, volume, relative volume)
• Scanner — Stock Hacker scanner for finding trading candidates
• Time & Sales — The tape showing individual trade prints

Chart configuration for day trading:

• Set your default chart type to candlestick
• Add VWAP as a study (Studies > Add Study > VWAP)
• Add volume bars below the chart
• Add 9-period and 20-period exponential moving averages
• Configure the chart to show extended hours data (premarket and after-hours)

Paper Trading with paperMoney

The paperMoney feature is one of thinkorswim's most valuable tools, especially for beginners. It provides a fully simulated trading environment with real-time market data and $200,000 in virtual funds.

How to access paperMoney: When you log in to thinkorswim, select "paperMoney" instead of "Live Trading" at the login screen. The paper trading interface is identical to the live platform, so everything you learn in paper trading transfers directly to live trading.

What paperMoney offers:

• Real-time quotes and market data
• Full charting and analysis tools
• All order types (market, limit, stop, complex)
• Options trading with Greeks and probability analysis
• $200,000 in simulated buying power (configurable)
• Complete trade history and performance reporting

Best practices for paper trading:

• Use realistic position sizes. Trading 10,000 shares in paper trading when your real account can only afford 200 shares teaches bad habits
• Trade during regular market hours for realistic fills
• Maintain a trading journal for your paper trades just as you would for real trades
• Set a specific duration (4-8 weeks) before transitioning to live trading

Charts and Studies: Deep Dive

The charting engine in thinkorswim is extraordinarily powerful. Understanding its capabilities unlocks a major advantage.

Built-in studies number in the hundreds, covering every common technical indicator and many obscure ones. Key studies for day traders include VWAP, moving averages (SMA, EMA), RSI, MACD, Bollinger Bands, volume profile, and ATR (Average True Range).

Adding studies: Right-click on the chart or use the Studies menu. You can add multiple studies simultaneously and configure their parameters (period, color, line thickness). Studies can be applied to the price chart or to separate sub-charts below the price.

Custom studies with thinkScript: thinkorswim includes its own programming language called thinkScript that allows you to create custom indicators, studies, and alerts. Even without programming experience, you can copy and paste thinkScript code from the thinkorswim community forums to add powerful custom studies to your charts.

Chart drawing tools include trendlines, horizontal lines, Fibonacci retracements, rectangles, and channels. These tools are essential for marking support/resistance levels, opening range boundaries, and key price levels.

Chart templates allow you to save your chart configuration and apply it to any symbol instantly. Create templates for different strategies (gap-and-go, ORB, swing trade) with the appropriate timeframe, studies, and layout.

The Active Trader Window

Active Trader is thinkorswim's advanced order entry interface designed for active day traders. It displays a vertical price ladder with bid and ask quantities at each price level, allowing visual order placement and management.

Key features:

• One-click order entry — Click on the bid or ask side of the ladder to instantly place a buy or sell order
• Visual order management — Drag pending orders up or down the ladder to modify price levels
• Bracket orders — Automatically attach a stop loss and profit target to every entry
• Customizable buttons — Create quick-entry buttons for your most common order types and sizes
• P&L display — Real-time profit/loss for your current position is displayed directly on the ladder

Setting up Active Trader properly transforms thinkorswim from a charting platform into a rapid-execution trading platform. The combination of charts for analysis and Active Trader for execution is the setup most professional thinkorswim day traders use.

Stock Hacker Scanner

Stock Hacker is thinkorswim's built-in stock scanner that can replace or supplement dedicated scanning tools.

The scanner allows you to filter stocks based on fundamental criteria (revenue, earnings, market cap), technical criteria (price above/below moving averages, RSI levels, volume), and custom studies (any thinkScript-based condition).

Creating a gap scanner for day trading:

1. Open Stock Hacker from the Scan menu
2. Set filters: Last price > $2, Volume today > 100,000
3. Add a custom filter: Percent change from prior close > 5%
4. Add a custom filter: Volume today > 2x Average Volume (20 days)
5. Sort by percentage change or volume

Stock Hacker updates in real time, making it suitable for intraday scanning during the trading session. However, it is not as fast or feature-rich as dedicated scanning platforms like Trade Ideas. Many traders use Stock Hacker as a supplementary scanner alongside their primary tool.

The OnDemand Feature

OnDemand is a unique thinkorswim feature that replays historical market data as if it were happening live. You can go back to any trading day in the past and watch the market unfold in real time, placing simulated trades as if you were there.

How to use OnDemand:

1. Click the OnDemand button in the upper right corner of thinkorswim
2. Select a historical date
3. Press play to watch the market replay in real time (or use fast-forward)
4. Place simulated trades using the same tools you would use live

Why OnDemand matters:

• Practice specific scenarios. Want to practice gap-and-go trades? Go back to a day with major gappers and practice your entries and exits.
• Review your own trades. Replay a day where you traded and evaluate your decisions with fresh eyes.
• Learn from market events. Replay the market action during major events (FOMC, CPI releases, flash crashes) to understand how the market behaves under stress.
• Develop without market hours. Practice on weekends or evenings by replaying past sessions.

Customization and Workspaces

thinkorswim's workspace system allows you to create multiple screen layouts and switch between them based on your current activity.

Day trading workspace: Charts (multiple timeframes), Active Trader, Level 2, scanner, and time & sales. This layout optimizes for rapid analysis and execution.

Swing trading workspace: Daily and weekly charts with key technical studies, watchlist with fundamental columns, and option chain analysis. This layout supports multi-day position analysis.

Research workspace: Earnings calendar, fundamental data, analyst ratings, and SEC filings. This layout supports due diligence before entering positions.

You can save and load workspaces, share them with other thinkorswim users, and create workspace-specific alerts and orders.

Frequently Asked Questions

Is thinkorswim free?

Yes. thinkorswim is free with a Schwab brokerage account. There are no platform fees, data fees, or subscription charges. You get real-time data, charting, paper trading, and OnDemand at no cost. Stock and ETF trades are commission-free; options are $0 commission + $0.65/contract.

Can I use thinkorswim on Mac?

Yes. thinkorswim is available as a native Mac application. The Mac version has the same features as the Windows version. There is also a web-based version accessible from any browser.

How long does it take to learn thinkorswim?

Expect 2-4 weeks to learn the basic functionality (placing trades, setting up charts, using the scanner). Becoming proficient with advanced features (thinkScript, Active Trader configuration, complex options strategies) can take 2-3 months of regular use. The learning curve is steep but the platform's capabilities justify the investment.

Does thinkorswim have good mobile apps?

Yes. The thinkorswim mobile app for iOS and Android provides charting, order entry, watchlists, and account management. While not as powerful as the desktop version, it is one of the better mobile trading apps available. Many traders use the desktop for primary trading and the mobile app for monitoring positions on the go.

Can I use thinkorswim for algo trading?

thinkorswim supports conditional orders and thinkScript-based strategies that can automate certain trading actions. However, it does not provide a full API for external algorithmic trading. For serious algo trading, Interactive Brokers or a dedicated API-driven broker is more appropriate.