How We Reviewed thinkorswim
65 agencies compared
3 weeks of research
1 top-ranking company
Thinkorswim is TD Ameritrade’s forex trading platform. It’s a full-service brokerage for savvy investors, and allows you to trade forex alongside your other investment products all from the same account. This powerful platform puts every imaginable forex trading tool at your fingertips, but the level of advanced features may not be ideal for beginners.
Thinkorswim claims to offer access to elite-level trading tools and resources. You’ll be able to trade equities, options, futures, and forex on a platform powered by insights, education, and a dedicated trade desk to help you nail even the most complex strategies and techniques.
Is it true?
Yes. Thinkorswim has all the resources of TD Ameritrade, a company with client assets in excess of 1.2 trillion dollars — with that kind of worth, you know they’re doing something right for its 11 million clients.
You’ll find some nice tools available, like paperMoney, which gives you a virtual margin account and virtual IRA, each funded with $100,000, to try out your strategies before you put real money on the line. You’ll be able to set rules to automatically trigger orders that help to manage risk, and access 400-plus technical indicators ranging from support and resistance to candlestick and profile. You can even build your own algorithms with something called thinkScript.
These features and many more make thinkorswim a terrific option for experienced forex traders, and the ability to do all your trading out of one account offers a streamlined experience even if forex is only part of your trading program.
Those who know what they’re doing with forex, and want a powerful tool that allows them to trade as they wish and take quick advantage of changing market conditions. Thinkorswim is also great for the investor who has multiple accounts across the board: forex, futures, stocks, options, and more, and are looking for a professional solution to manage and track a diverse portfolio. Some brokers make you open separate accounts to trade different products. With thinkorswim, it’s seamless and efficient.
Thinkorswim has so much on offer that it might be a bit much for novice investors. It takes some work, and good knowledge of the language of finance, to get up to speed on the platform. Beginners might be happier with a platform that’s a bit simpler and easier to manage. Thinkorswim’s minimum deposit is $3,500, which may also put it out of the running for first-timers.
|Price||Commission: $0.10/1,000 units, min. $1
Non-commission: pairs trade in 10,000 unit increments; cost is reflected in wider spreads, and TD Ameritrade is compensated by liquidity provider based on non-commission pair volume
|Standout features||Integrated trading account, advanced research and trading tools, wide range of data on global economies|
|Forex trade cost type||Flats and pips|
|Clearing method||Dealing desk|
|Maximum leverage (international)||50:01:00|
|Maximum leverage (U.S.)||50:01:00|
Commission and non-commission pricing
If you’re looking for flexibility, thinkorswim’s variable pricing structures give you options. Non-commissioned pairs trade in increments of 10,000 units, with the company compensated through the standard spread. If you’re interested in commission-based trading, thinkorswim charges a fee for each trade, which can lower trading costs for higher-volume investors.
Great mobile app
If you do business from your cell phone, you’ll like the real-time quotes and charts with more than 180 studies that let you execute in-depth technical analyses and find the best price on the spur of the moment. Set up custom alerts to let you know about position changes, so you can easily stay on top of things. The app has earned 4 stars on Google Play and 4.5 stars on Apple’s App Store — this product has a lot of fans.
Top broker for currency pairs
Thinkorswim offers 70-plus tradable currency pairs, which puts them at the top of the pile among brokers in this category. If you have the experience, you’ll be able to leverage currency fluctuations in less developed economies and add some nice diversity to your portfolio.
Autotrade availability limited
Although thinkorswim is generally a robust platform, it lacks an automated trading option, unless you are a subscriber to one of their partner advisory newsletters. The problem there is that most of the newsletters are focused on options trading, not forex. If you absolutely need an autotrade feature, take a look at FXDD or eToro.
Chaotic chat room
Thinkorswim’s chat rooms are a mixed bag. Sure, you’ll find some knowledgeable individuals online with whom to share strategies and ideas. But it can also get pretty chaotic, and there’s no way of knowing if the person you’re talking to is good at what they do or not. Any tips you pick up in a chat room should definitely be taken with a grain of salt.
thinkorswim vs. Ally Invest
If you’re looking to get started in forex trading, Ally Invest might be a better option for you than thinkorswim. You can begin trading with only $250 — compared to $3,500 for thinkorswim — and a very favorable fee structure lets you put more money in your account and less in a broker’s pocket. Ally’s trading platform is user-friendly and easy for newbies to figure out. Trading panel shortcuts let you customize the experience so that it works well for you. One caveat: Ally Invest, unlike thinkorswim, doesn’t allow you to do all your trading within the same account, which can be a hassle if you’re also interested in trading stocks, options, or futures.
thinkorswim vs. ATC Brokers
ATC Brokers, like thinkorswim, is more suitable for the experienced investor. High-end trading tools and perks like a non-dealing desk environment are appealing. The platform lets you customize and execute orders quickly, and move between analysis and trading without having to navigate between windows. It lacks beginner-friendly features like extensive educational resources, but does provide backtest trading software to run simulations and test run your strategy.
thinkorswim vs. OANDA
OANDA offers benefits for newbies and experienced traders alike, with robust platforms that work well on desktop or mobile. Its focus is exclusively on forex trading, so if you’re interested in diversifying your interests, thinkorswim is a better option. OANDA has some great perks, though, like its access to historical exchange rate data, which allows you to backtest strategies. You can also subscribe to a data feed to gain even more and deeper analysis before you trade.
How easy is it to make money with forex?
Forex trading takes skill and, to maximize your returns, deep pockets. It’s certainly possible to make money with forex, but it’s also possible to lose money.
As Forex.com says on its risk warning page: “The possibility exists that you could sustain a total loss of initial margin funds and be required to deposit additional funds to maintain your position. If you fail to meet any margin requirement, your position may be liquidated and you will be responsible for any resulting losses.”
In other words, it’s entirely possible to not only lose all the money you deposit, but also owe additional money on top of that loss. Factors from currency volatility to market manipulation can play a role in your ability to earn a positive return. If you’re a beginner, you may want to limit your initial investment and leverage, and use all the resources available at a reputable forex brokerage like thinkorswim to help give you an edge.
How do I go about picking the best forex broker for me?
We’ve given you some tips on what you should be looking for in our review, but here are a few other things to take into account.
First, be suspicious of unregulated firms. In the U.S., brokers are regulated by the National Futures Association (NFA). Canada and much of the EU also employ regulatory firms. Outside of those areas, however, you may see firms with no regulatory oversight. Approach them with caution.
Second, create a budget before you look for a forex broker. That way you won’t be swayed by a flashy company with a high minimum or expensive fees — which is easy to do when you’re starting out.
Third, do your homework. Forex trading is complex. Check out the wealth of free information at sites like Investopedia and Bloomberg (which allows some access for non-members) so that you understand the language of forex and how the process works before you dive in.
Do I need to worry about the safety of my funds with forex trading?
Possibly. For one thing, brokers can get hacked and they can, unfortunately, go bankrupt. If you’re trading in stocks, your funds are protected by the Securities Investor Protection Corporation (SIPC). Forex traders don’t have this reassurance.
Also check to see if brokers offer negative balance protection, which says you won’t be liable for more money than your account balance if there’s a crash. If this is a concern for you, you’ll want to go with a brokerage house that’s allied to a bank or well-known financial institution.