Thinkorswim for Scalping
If you want to scalp stocks but are unsure about which broker to use, you may want to consider
Charles Schwab with its trading plaform called Thinkorswim. Thinkorswim is well known for its range of tools and features, and many of those are geared towards the active trader.
Whether you are looking for up-to-date market information and news, fast order execution, depth of market, pro-level charting, hotkey support, or robust scanning technology, Thinkorswim has an assortment of tools designed to help you scalp stocks.
Thinkorswim Platforms for Scalping
Charles Schwab is a full-service broker, offering many services to its clients. As such, the broker has
multiple trading platforms for you to choose from. For scalping stocks, each one comes with its own set
of pros and cons, but thinkorswim (TOS) is certainly the most capable of the lineup.
At Charles Schwab, you can trade on the web platform, the desktop trading software, thinkorswim web, or the mobile app.
The desktop trading software comes with all the bells and whistles that you need for scalping. It features built-in scanners, excellent charting capabilities, an active trader interface, a newsfeed, and much more. Whether you want to scalp penny stocks, ETFs, FANGS, or any other highly liquid security available on the platform, TOS will help you get in and out of trades very quickly.
The web platform is perfect for basic order entry. It is the broker’s main interface and features all of your account information, research, tools, and education. The web platform is also where you can open new accounts, monitor your security settings and more. For scalping stocks, it leaves a lot to be desired, however.
Thinkorswim Web is a relative newcomer to the platform lineup but it may not be the best for scalping. It could, of course, be used for active order execution but it feels a bit sluggish when compared to the desktop software. There are fewer tools and less functionality built into the thinkorswim web platform.
The Mobile App is quite capable and is great for trading on the go. Charting is surprisingly good for a
mobile app, advanced order entry options are available, and building watchlists is a simple process.
Depending on the type of stock scalping you plan to do, the mobile app may or may not be helpful.
There are no instant trade entry methods, navigating from chart to order entry screen takes time and could result in unfavorable fills. There is also no scanner built into the mobile experience.
Free Thinkorswim Account
Open Thinkorswim Account
Thinkorswim Tools for Scalping
To determine whether Thinkorswim is the right broker for you, you will need to consider the tools that are available. Depending on your scalping methodology, you may prefer one set of tools over another.
Most of the features used by active day traders and scalpers are present on TOS, which is why it has become so popular with active traders.
Let’s have a look at how TOS stands up to the rigors of scalping stocks.
- Hotkey Support
- Charting
- Custom Scans
- Direct Routing
- Level 2 Data
- Heatmap
- Newsfeed
- Indicator Support
Account Types for Scalping
Scalping stocks requires that you enter and exit positions with a high level of frequency. Because of
that, there are some rules to consider. The two rules that affect scalpers the most are
PDT (pattern day trader) and GFV (good faith violation). The PDT rule affects margin accounts and GFV rule affects traders with cash accounts.
The pattern day trader rule stipulates that a trader cannot make more than three day trades within a five-day rolling period unless the trader has a minimum of $25,000 in the trading account.
The GFV rule states that traders cannot sell securities they have purchased until the money they used to purchase those securities has settled. Settlement usually takes around 2 days following the trade date.
If you plan on scalping stocks throughout the trading day, finding a way around these rules is important.
If you open a margin account with Charles Schwab, maintaining a balance in excess of $25,000 means that you don’t have to worry about the PDT rule. If your account size is smaller than the $25,000 PDT threshold, you will need to find other strategies. Legging into verticals (with calls or puts) when the first contract becomes profitable, trading micro futures contracts, and using several accounts to trade are all viable alternatives for intraday trading.
To avoid the GFV rule, simply do not trade with unsettled funds. Many traders divide up their investment account balance to match the settlement period for securities, and the frequency at which they plan to trade.
Fees and Commissions
Thinkorswim has an attractive fee schedule for scalpers and other high-frequency traders. The broker
does not charge a commission on stock transactions, and regulatory fees are quite small.
Traders are responsible for regulatory fees ($0.000166 per share) but they are insignificant for most stock scalpers.
Market data for Nasdaq, OPRA, AMEX, and NYSE, including both Level I & II market depth, is also free
for investors.
Free Thinkorswim Account
Open Thinkorswim Account
Pros and Cons of Scalping Stocks at Thinkorswim
There are many things that we like about Thinkorswim for scalping stocks, and a couple areas that could use some improvement.
Pros
- Desktop trading software has many useful tools
- Charting is top-notch
- Low-cost trading
- Direct order routing available
- Free market depth from all major exchanges
- Multiple way to enter orders and hotkey support
Cons
- Alternative platforms are not conducive to scalping
- Trading platform comes with a learning curve
Scalping Stocks on Thinkorswim Summary
All in all, Thinkorswim provides a solid scalping experience to investors looking for a wealth of
tools and services. While it may not be ideal to scalp on the web or mobile interfaces, thinkorswim
offers all the functionality an active trader needs to take advantage of price movement throughout the
day. The direct order routing, hotkey support, active trader window, screeners, and customizable chart
layouts make Charles Schwab and thinkorswim solid contenders.
Updated on 4/11/2025.
Continue Reading