When new information or data conflicts with your market outlook, are you the type who allows your ego to get in the way, or are you open to change?
Some would call that openness "mental flexibility," and in the often isolating world of markets, physical flexibility can help promote mental flexibility. The new “Drawings Made Easy and Accessible” update on the thinkorswim® platform from TD Ameritrade can guide you toward both these types of flexibility.
But before we go into the applications for this new update, let’s take a moment to briefly cover the mechanics.
The new drawing tool set allows you to create custom drawing sets—your personalized chart drawings—tied to specific charts and symbols, and store them all on the cloud. So each chart has its own drawing set, and each drawing set is uniquely tied to a symbol. This allows you to create any number of drawing sets for stock ABC, but keeps them separate from sets for XYZ, or any other symbols.
Drawing Sets in Action
One of the most powerful things about this new feature is the way you can use it for a “top-down” approach toward chart analysis. Let’s look at an example of how this can work by creating and saving three new drawing sets, which we’ll call “long-term trend,” “support levels,” and “intraday look.”
Long-term trend: Figure 1 pulls back wide on the chart to show more data—in this case, one year’s worth—and with primary trendlines drawn in. This can give you a clear and easy-to-read macro view. These lines indicate a possible uptrend in both the long-term and intermediate terms.
Support levels: Once potential trends are identified, we can define and annotate support and resistance levels by going back to the default drawing set (which has no drawings) and drawing lines to indicate what we think are the important levels. We then save this set as “Support Levels.” By creating a new set, with unique drawings, the previous set’s trendlines remain intact.
Now, here’s where things get really cool.
Intraday look: Having reviewed the macro picture, we can drill down to the short-term, intraday view using a 5-minute chart like the one shown in figure 3. We can get super detailed with with the drawing and annotations to help identify potential entry and exit points. It’s on this view where text notes can really help. Once this view is set up, we can save it in a new drawing set called “Intraday Look.”
The Power of Flexibility
As you can see, being able to create independent drawing sets tied to specific symbols can potentially improve the flow and quality of analysis. Toggling through saved drawing sets can enable you to quickly and efficiently monitor individual stocks, ETFs, and indexes to promote a more holistic approach to chart analysis.
Because the drawings in one set don’t overlap with others, your chart view will remain clean and easy to read, showing you only the relevant annotations for the particular time frame or vantage point of your choosing.
One added feature is cloud storage of your drawing sets, meaning you can access your saved drawings from any computer. So you can move about, unchained from your desk, knowing that, wherever you log in to thinkorswim, your drawings are there.