Thinkorswim Review

Best, Largest Currency Trading Forex Brokerage Firm 2015



Largest Forex Brokerage Firm Trading Platform/Tools Review


I have been a client with TD Ameritrade for several years and was always disappointed that they didn’t have a way for clients to trade FOREX and futures. During that time, I had read great things about ThinkorSwim, which did allow these types of accounts. So when Ameritrade bought ThinkorSwim and opened it up to their clients, I was ecstatic. Within the ThinkorSwim platform you can trade almost every type of investment that you can think of: stocks, options, FOREX and futures. In addition, ThinkorSwim is an advanced trading platform with fantastic technical analysis tools for chart readers, which is critical for those of us that are traders. There’s also mobile app support for when you’re on the go. Although ThinkorSwim can execute multiple types of trades, I will focus my review on the FOREX capabilities of ThinkorSwim.

The ThinkorSwim platform is a desktop application that you need to download from the TD Ameritrade website. To be eligible you only need to be a client of TD Ameritrade. Opening and funding your account is easy and you can even deposit funds electronically. The minimums are very low. Once you have an account, you can transfer funds between different types of accounts instantly. I funded my FOREX account from my regular stock and options account with only $500. You’ll also need to sign and fax agreement forms in to activate your account. These agreements are like options agreements and just have you sign that you understand the risks involved with FOREX trading. It can take 1-2 days to get it all setup and active.


ThinkorSwim/TD Ameritrade Currency Pairs


ThinkorSwim allows you to trade both major and exotic pairs. This gives you tremendous diversity as a FOREX trader, especially if you want to invest in currencies from other strong economies like Norway or Singapore. Here is a full list of all the diverse TD Ameritrade currency pais you can trade (total 137 currency pairs):

AED United Arab Emirates Dirham AUD/CAD CHF/PLN EUR/NOK GBP/ZAR TRY/JPY
AUD Australian Dollar AUD/CHF CHF/SEK EUR/NZD HKD/JPY USD/AED
CAD Canadian Dollar AUD/CZK CHF/SGD EUR/PLN MXN/JPY USD/CAD
CHF Swiss Franc AUD/DKK CHF/TRY EUR/RON NOK/DKK USD/CHF
CZK Czech Koruna AUD/JPY CHF/ZAR EUR/SEK NOK/JPY USD/CZK
DKK Danish Krone AUD/NOK CZK/HUF EUR/SGD NOK/SEK USD/DKK
EUR Euro AUD/NZD CZK/JPY EUR/THB NZD/CAD USD/HKD
GBP Pound Sterling AUD/PLN DKK/CZK EUR/TRY NZD/CHF USD/HUF
HKD Hong Kong Dollar AUD/SEK DKK/HUF EUR/USD NZD/CZK USD/ILS
HUF Hungarian Forint AUD/SGD DKK/JPY EUR/ZAR NZD/DKK USD/JPY
ILS New Israeli Shekel AUD/THB DKK/PLN GBP/AUD NZD/HUF USD/MXN
JPY Japanese Yen AUD/USD DKK/SEK GBP/CAD NZD/JPY USD/NOK
MXN Mexican New Peso AUD/ZAR DKK/SGD GBP/CHF NZD/PLN USD/PLN
NOK Norwegian Kroner CAD/CHF DKK/THB GBP/CZK NZD/SEK USD/RON
NZD New Zealand Dollar CAD/DKK DKK/ZAR GBP/DKK NZD/SGD USD/SAR
PLN Polish Zloty CAD/JPY EUR/AUD GBP/HUF NZD/THB USD/SEK
RON Romanian Lei CAD/NOK EUR/CAD GBP/JPY NZD/USD USD/SGD
SAR Saudi Arabian Riyal CAD/PLN EUR/CHF GBP/NOK NZD/ZAR USD/THB
SEK Swedish Krona CAD/SEK EUR/CZK GBP/NZD PLN/CZK USD/TRY
SGD Singapore Dollar CAD/SGD EUR/DKK GBP/PLN PLN/HUF USD/ZAR
THB Thai Baht CHF/CZK EUR/GBP GBP/SEK PLN/JPY ZAR/JPY
TRY Turkish Lira CHF/DKK EUR/HKD GBP/SGD SEK/JPY
USD U.S. Dollar CHF/HUF EUR/HUF GBP/THB SEK/PLN
ZAR South African Rand CHF/JPY EUR/JPY GBP/TRY SGD/JPY



ThinkorSwim/TD Ameritrade Forex Margin/Leverage


In addition, I like it because their leverage requirements are lower than other more popular FOREX platforms. They use a 50:1 and 20:1 leverage model depending on whether the pair you’re trading is a major pair or exotic pair. Here are two examples of what this would mean.

BuyingRequires
10,000 units USD/NZD (major pair) 50:1 leverage = $200 margin requirement
10,000 units USD/MXN (exotic pair) 20:1 leverage = $500 margin requirement



ThinkorSwim/TD Ameritrade Margin Calls


TD Ameritrade will automatically liquidate your position if your margin meets one of the following criteria:

1. On any account with a risk level of less than 100% at 5 am EST. 2. Intraday if the risk level in the account falls to 25% or below, whichever comes first.

ThinkorSwim allows you to trade standard, mini and micro lot sizes. There is no monthly fee or charge to use the service, desktop software or mobile app. There is also no fee or charge for trading standard or mini lots. A standard lot equals 100,000 units and a mini lot equals 10,000 units. However if you trade micro lots, lots of 1,000 units, the following fees apply: ($1 minimum and/or $0.10 per 1,000 units).

For example, the commission from a 1,000-lot EUR/USD trade would be USD $1 ($1 minimum and/or $0.10 per 1,000 units).

If you’re trading standard and/or mini accounts, Ameritrade makes their money on the difference between the bid and ask like many other brokers. They do not have as tight of spreads as some of the other FOREX services in the market but they’re also not outrageous. In addition, I find that I have a fighting chance to make money with them. Other services that offer 100:1 or 1000:1 leverage just steal your money in a matter of minutes because it’s too hard not to hit a margin call.


TD Ameritrade/ThinkorSwim Forex Trading Summary


One of the best things about ThinkorSwim is the platform trading software. The charting and trading screens are very customizable to your preferences. You can move windows around, change colors and add or subtract hundreds of preset technical studies as you like, including some that you can only find in ThinkorSwim like market forecast, trade the market and others. Of course you have many other advanced studies like Fibonacci analysis tools and drawing tools to draw your own support and resistance lines. I recommend ThinkorSwim to anyone, whether you’re trading options, stocks or FOREX.


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This article was updated on 7/23/2015.


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