How to Trade Forex on Thinkorswim: A Beginner’s Guide

Forex trading is the process of buying and selling currencies in the global market.

Forex trading can be a lucrative and exciting activity, as it offers the opportunity to profit from the fluctuations in currency exchange rates.

However, forex trading also involves significant risks and challenges, as it requires a lot of knowledge, skills, and discipline.

To succeed in forex trading, you need a reliable and user-friendly trading platform that can facilitate your trading journey.

Thinkorswim, developed by TD Ameritrade, is one such platform that offers a comprehensive set of tools and features specifically designed for forex trading.

It is a powerful and versatile platform that allows you to trade forex, stocks, options, futures, and more, all from one place.

In this beginner’s guide, we will explore how to use thinkorswim for forex trading and highlight its key functionalities.

We will cover the following topics:

  • Getting started with thinkorswim
  • Understanding the thinkorswim forex trader
  • Placing your first forex trade
  • Essential trading tools and strategies
  • Risk management and best practices

By the end of this article, you will have a clear and comprehensive knowledge of thinkorswim and how to use it to your advantage.

Screenshots of the Thinkorswim platform
Image illustrations of Screenshots of the Thinkorswim platform

Table of Contents

Getting Started with Thinkorswim

To begin using thinkorswim for forex trading, you first need to create an account with TD Ameritrade.

The process is relatively simple and can be completed online.

You will need to provide some personal and financial information, such as your name, address, social security number, income, and investment objectives.

One will also need to choose the type of account you want to open, such as a standard, retirement, or education account.

Once your account is set up, you can download and install the thinkorswim platform on your computer or use the web-based version.

The platform is available for both Windows and Mac OS.

You can also access the platform on your mobile devices, such as smartphones and tablets, through the thinkorswim app.

Upon launching thinkorswim, you will be greeted with a visually appealing and intuitive interface.

The platform offers a customizable layout, allowing you to arrange various windows and tools according to your preferences.

The main components of the interface include the watchlist, charts, trade tab, and sidebar.

  • The watchlist displays a list of currency pairs, along with relevant information such as bid/ask prices, daily change, and trading volume.
  • You can add or remove currency pairs from the watchlist based on your trading interests.
  • The charts window provides a detailed view of the selected currency pair, allowing you to perform technical analysis using a wide range of drawing tools, indicators, and chart types.
  • The trade tab allows you to place and manage your trades, as well as access various order types, such as market orders, limit orders, stop orders, and trailing stop orders.
  • The sidebar provides quick access to various features and tools, such as account information, news, alerts, chat rooms, and more.

Understanding the Thinkorswim Forex Trader

One of the standout features of thinkorswim is its forex trader, which is a dedicated section of the platform that offers unique features and tools specific to forex trading.

To access the Forex Trader, you need to click on the “Forex Trader” tab in the left-hand menu.

Here, you will find the following features:

  • Explore the currency map for currency strength and trends.
  • Utilize the Forex snapshot for quick market insights.
  • Calculate values with the Forex calculator for trade planning and risk management.
  • Assess currency pair performance with the Forex heat map for optimal trading times

Placing Your First Forex Trade

To place your first forex trade on thinkorswim, you need to follow these steps:

  • Select the currency pair you want to trade from the watchlist or the forex trader. You can also use the search box to find the currency pair by typing its symbol or name.
  • Choose the order type you want to use, such as a market order, a limit order, a stop order, or a trailing stop order. A market order executes your trade at the current market price, while a limit order executes your trade at a specified price or better. A stop order executes your trade when the market price reaches a specified level, while a trailing stop order adjusts the stop level as the market price moves in your favor.
  • Enter the trade size and price, as well as the stop-loss and take-profit levels, if applicable. The trade size is the amount of currency you want to buy or sell, expressed in units or lots. A lot is a standard unit of measurement in forex trading, equal to 100,000 units of the base currency. The price is the level at which you want to enter or exit the trade, depending on the order type. The stop-loss and take-profit levels are the levels at which you want to close your trade automatically to protect your profits and limit your losses.
  • Confirm and execute your trade by clicking the “Buy” or “Sell” button, depending on whether you want to go long (buy) or short (sell) the currency pair. You will see a confirmation window that shows the details of your trade, such as the order number, the execution price, the commission, and the net liquidating value. You can also modify or cancel your trade before it is executed, if necessary.

Essential Trading Tools and Strategies

To enhance your forex trading experience and performance on thinkorswim, you can use various trading tools and strategies that are available on the platform. Some of the essential trading tools and strategies are:

  • Technical indicators are mathematical calculations that analyze the price movements and trends of the currency pairs. Thinkorswim offers a vast library of technical indicators, such as moving averages, RSI, MACD, Bollinger Bands, and more. You can add and edit indicators on your charts, as well as customize their parameters, colors, and styles.
  • Chart analysis tools, are graphical tools that help you identify and draw patterns, levels, and signals on your charts. Thinkorswim offers a wide range of chart analysis tools, such as trend lines, Fibonacci retracements, channels, and more. You can use these tools to support your technical analysis and trading decisions.
  • Popular forex trading strategies, are predefined sets of rules and guidelines that help you enter and exit trades based on certain criteria and conditions. Thinkorswim offers various popular forex trading strategies, such as scalping, swing trading, breakout trading, and more. You can apply and test these strategies on your charts, as well as modify and create your strategies.

Risk Management and Best Practices

Forex trading involves significant risks and challenges, as the market is highly volatile and unpredictable. Therefore, it is important to practice risk management and follow some best practices to ensure your trading success and safety. Some of the risk management and best practices are:

  • Stop-loss orders are orders that automatically close your trade when the market price reaches a specified level, preventing further losses. You should always use stop-loss orders to protect your capital and limit your risk exposure.
  • Risk management strategies, are methods and techniques that help you control and reduce your trading risk, such as position sizing, diversification, and hedging. You should always apply risk management strategies to optimize your trading performance and avoid excessive losses.
  • Responsible trading habits, are behaviors and attitudes that help you maintain a healthy and positive trading mindset, such as discipline, patience, consistency, and learning. You should always practice responsible trading habits to avoid emotional and impulsive trading, as well as to improve your trading skills and knowledge.


Utilize Thinkorswim for confident forex trading.

Learn its features with this guide.

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We hope this article has been helpful and informative for you.

If you have any questions or comments, please feel free to leave them below. Thank you for reading and happy trading.

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