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Ask the Suit: Learning Center and Risk Management

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September 28, 2016
ask the suit
Fredrik Broden

I just opened a new account with you guys. What’s the best way to master the platform?

Welcome to the family! We’re so happy to have you. For the past four years in a row, TD Ameritrade has been named “Best for New Investors” from Stockbrokers.com. We’ve put a lot of effort into creating resources to help you get the most out of the platform. The best place to start is the thinkorswim® Learning Center where you can find video tutorials on almost all of our features. Our Swim Lessons Chat Rooms, located in the thinkorswim chat rooms, is another place where you can immerse yourself in our technology daily. Ex-floor traders talk about the markets but blend their perspective to the tools in our platform. And finally, if you are looking for a more one-on-one experience, just call 866-839-1100 to schedule a customized platform demo with one of our trading specialists.

In the past year, we’ve had a few days of volatile market drawdowns. What’s the best way to prepare for those?

In most cases, unless you have a magic crystal ball, you won’t know when they are going to happen. Order entry is a pillar of successful trading and can be used as a tool to manage risk in your account. We offer a variety of order types you can use to effectively enter and exit positions such as stop, limit, and stop-limit orders. Once again the Learning Center and Swim Lessons can be valuable resources in learning how to incorporate effective order placement into your trading plan. But there will be times when you may have a pretty good idea that major volatility is about to happen. Take the Brexit vote for example. When the decision was imminent, a lot of our traders took off their stop orders and instead set alerts. Why? Sometimes market conditions call for you to examine what’s going on at the moment before making a decision. If you had stop orders on for Brexit, you might have exited at a low only to find that the markets not only rebounded but headed up to peak levels. Options may also provide the ability to hedge your positions to eliminate some of your directional risk, particularly for those of you who primarily have long only portfolios.

And finally, one of my favorite ways to manage risk is by beta weighting. If you don’t know what I’m talking about, be sure to check out our Learning Center video or the many articles in the thinkMoney archives on the topic.