Last updated: September 26, 2022

The Basics of Thinkorswim Studies

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The Basics of Thinkorswim Studies

Thinkorswim studies are a unique and powerful tool that can help you become a better trader. But what are Thinkorswim studies, and why should you use them? In this article, we'll answer those questions and more.

1. What are Thinkorswim studies and Why Should You Use Them?

Thinkorswim studies are essentially technical analysis add-ons to the platform. Technical Analysis is the use of charts tracking prices and identifying trends to predict where prices will go in the future. 

The Basics of Thinkorswim Studies- Thinkorswim Learning center Technical analysis

Thinkorswim Learning center Technical analysis

So why should you use Thinkorswim studies? There are a lot of reasons:

1. They can help you make smarter decisions about what trades to make

2. They can help you understand what is happening in the markets

3. They can give you an edge over other traders who don't use them

Technical analysis is also becoming a self-fulfilling prophecy, in the past these patterns were identified as they were repeated over and over.  However in the last number of years these patterns have been hard coded into algorithms which some believe can make the patterns even more reliable.

The algorithms now actively respond to and create these patterns themselves instead of them happening organically as in the past.

2. How to Use Thinkorswim Studies

Using Thinkorswim studies is actually pretty simple:

1. First, open up the thinkorswim platform and go to the "Studies" tab

2. Next, find the study you want to use and select it

3. Finally, apply the study to your chart

3. How to use Thinkorswim Studies in Your Trading

There are a few things you should keep in mind when using Thinkorswim studies:

1. Studies are just tools - they are not perfect. They can help you make better decisions, but they can also lead you astray if you don't use them properly.


2. Studies are only as good as the data they are based on. If the data is bad, the studies will be too.


3. You need to understand what the studies are telling you. Just because a study says something doesn't mean it's true. Always think for yourself and do your own research before making any trading decisions.


4. Studies can also be correct until they are not. You need to be wary of putting 100% faith into them

The Basics of Thinkorswim Studies- Thinkorswim Trading Platform

4. Examples of Thinkorswim studies that can help your trading

The Thinkorswim learning center has a complete list of all official studies available on the platform, organized alphabetically. Here are some of the more popular ones, and several have their own article on this blog.

1. Bollinger Bands

Bollinger bands are a tool that can help you understand when a stock is overbought or oversold. They can also help you find entry and exit points for trades.

More information on a Bollinger Band Squeeze Scan on Thinkorswim is here.

2. Moving Averages

Moving averages are a type of study that can help you smooth out price data and identify trends. They can be used to find buy and sell points, as well as to measure support and resistance levels.

MACD Crossover alert is a common use of this on Thinkorswim. 

3. RSI

RSI is an indicator that shows strength of a stock's recent moves. It can be used to find overbought or oversold conditions, as well as to identify buying and selling opportunities.

There is more on the RSI Divergence indicator on Thinkorswim here.

4. MACD

MACD is a Thinkorswim study that measures the difference between two moving averages. It can be used to identify trends, as well as to find entry and exit points for trades.

You can read about a Zero lag MACD here.

5. Fibonacci Retracements

Fibonacci retracements are a technique that can help you find support and resistance levels. They can also be used to identify entry and exit points for trades.

Fibonacci is often used in conjunction with Donchain channels which you can read about here.

These are just a few examples of Thinkorswim studies that can help you trade better. There are many more out there, so be sure to explore and find the ones that work best for you.

The Basics of Thinkorswim Studies- Thinkorswim Studies Fibonacci Retracements

Thinkorswim Studies Fibonacci Retracements

Conclusion

Thinkorswim studies are a powerful tool that can help you trade better. But like any tool, they need to be used properly. Use them wisely and they can give you an edge over other traders but use them incorrectly or recklessly and they can cost you money. 

As always, think for yourself and do your own research before making any trading decisions.

You might be also interested in EMA Cloud on Thinkorswim and Conditional Order and How to Flatten Position on Thinkorswim.


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