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Thinkorswim Strategies

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With the current market instability worldwide, you have to find the most effective and consistent way to beat the volatility and make your investments worthwhile. Fortunately, you can now rely on Thinkorswim (TOS)–a trading platform owned by Ameritrade to assist investors in stocks, bonds, futures, exchange-traded funds, foreign exchange, mutual funds, and other assets. For instance, you can use Thinkorswim indicators to identify market trends so that you can know when it’s more favorable for you to trade.

The two main types of TOS indicators are strategy and studies. For study indicators, you can either use Thinkorswim studies or Thinkorswim custom studies for your trading. But whether you use the study or strategy TOS indicators, you’ll need to hire a Thinkorswim programmer to help you build your favorite indicators. Fortunately, you can now find highly qualified and experienced freelance TOS developers on any reputable freelance job platform like Guru.

The developer you hire needs to be familiar with the various Thinkorswim strategies and have experience in applying them to different types of trading in real time. The only way you can hire the right TOS developer for your trading is if you understand TOS strategies and how they work. That way, you’ll know which Thinkorswim development skills and tools are needed for your project.

What Are Thinkorswim Strategies?

TOS strategies are systems of conditions that have the potential to trigger replicated signals to either enter or exit the market. These are indicators that can help you to identify favorable market trends so that you can trade successfully. With these indicators, you’ll know when the time is right for you to either sell or buy.

Thinkorswim allows you to back-test the performance of specific strategies by reviewing the reports provided in the generated signals. Simply right-click the signal and click the ‘Show Report’ option on the pop-up menu. When you understand the whole concept of TOS strategies, you’ll learn how to use them to improve your trading experience and find the right programmer to set them up for you.

Entry and Exit TOS Strategies

Your Thinkorswim developer should understand that strategies should be applied in pairs. For instance, a Long Entry (LE) or a Short Exit (SX) strategy should accompany a Short Entry (SE) strategy. It’s also important to note that Entry strategies work together with Entry and Exit properties. This means that a LE strategy will serve as an exit for an SE strategy and the other way round.

Nevertheless, some entry strategies are specifically designed to offer only entry signals. The good thing is that these properties are customizable. You simply use the Pos effect radio buttons offered by the ‘Edit Studies and Strategies’ window. This is where a qualified and experienced TOS programmer comes in handy–they’ll know how to use the available tools to customize the properties and build your preferred indicators.

Specifying Global Settings for Your TOS Strategies

You can now specify your universal settings for TOS strategies by clicking the ‘Global Strategy Settings’ button in the ‘Edit Studies and Strategies’ window. The settings have the number as well as the creation style of entry orders; this style comes in a similar direction and standard trade size, which is the number of contracts you can buy and sell.

The standard trade size is put together for the buy or sell signal that is indicated on the chart. Allowing the ‘Display FloatingPL Study with Strategies’ inevitably adds the ‘FloatingPL Study’ to a lower subgraph, but you need to understand that global settings can only be applied to a current chart. Nonetheless, you can keep them in the ‘Style’ menu as the graph defaults.

Backtesting with a Strategy Report

After adding the preferred pre-defined or recently developed strategies, TOS allows you to backtest them and their performance with a Strategy Report. This feature makes allowances for every buy and sell signal recommended by the strategy while estimating the Profit or Loss value. Here are the common details about the trade that are usually recommended by the strategy:

  • Strategy–the name of the strategy that has generated the trade signal
  • Side–the direction of the trade and the position effect
  • Quantity–the number of contracts you can trade
  • Amount–the number of contracts increased by the dollar value that’s explicit to the instrument
  • Price–the price for each traded asset
  • Date–the date or time when the trade is suggested
  • Trade P/L–the profit or loss value of the specific trade
  • P/L–the cumulative profit or loss value
  • Position–your position following the specific trade 

The TOS developer you hire for your indicators should understand the various strategies available and how to customize them to help you beat market volatility. With this information, you should be able to ask them the right interview questions when searching for the perfect Thinkorswim expert on Guru.

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