How to Create Trailing Stop Orders on thinkorswim

TL;DR

To create trailing stop orders on thinkorswim, right-click on a stock and select 'Create closing order', then choose 'TRAILSTOP'. You can set offsets in dollars or percentages, and opt for a trailing stop limit for more price control. Regular trail stops provide a higher likelihood of selling the stock, while limit orders enhance price control without guaranteeing a fill.

Transcript

Hello, traders. I'm Jeremy Kuhlman and in this video, I'm going to show you how to place trail stop orders on the thinkorswim® desktop platform. We're going to show you a few different examples, starting with how to do a trail stop based off of $1 offset; second, we're going to do one with a percentage offset; and finally, at the end, we're going t... Read More

Key Insights

• ✋ The thinkorswim desktop platform provides options for creating trail stop orders based on different offsets.
• 😷 Selecting the mark price as the reference point for trailing is suitable for liquid stocks, while using the bid or ask prices may be preferable for stocks with wider bid/ask spreads.
• ✋ Trail stop limit orders offer more price control but do not guarantee a fill, while regular trail stop orders provide a higher probability of selling but have less price control.
• 😫 It is important to consider the time frame and potential price changes when setting a trail stop order.
• 😫 The platform allows for adjusting the offset and setting orders as good 'til cancel for flexibility and convenience.
• 🪈 Monitoring working orders in the "Monitor" section of the platform helps track and manage trail stop orders.

Questions & Answers

Q: What is a trail stop order?

A trail stop order is an order that automatically adjusts as the price of a stock moves, allowing traders to lock in profits or limit losses.

Q: How can I create a trail stop order on thinkorswim?

To create a trail stop order on thinkorswim, right-click on the stock you want to sell, select "Create closing order," choose "STOP," and then change it to "TRAILSTOP" and adjust the offset as desired.

Q: What is the difference between a trail stop order with a $1 offset and a percentage offset?

A trail stop order with a $1 offset adjusts the stop price by a fixed dollar amount, while a trail stop order with a percentage offset adjusts the stop price based on a percentage change from the mark price.

Q: When should I use a trail stop limit order?

A trail stop limit order should be used when you want more control over the price at which you sell a stock. This type of order allows you to set a limit price for the order once the stop price is triggered.

Summary & Key Takeaways

• The video demonstrates how to create a trail stop order on the thinkorswim desktop platform.

• The process is shown using examples with a $1 offset, percentage offset, and trail stop limit order.

• The video also discusses considerations for selecting the price to trail, such as using the mark price or bid/ask spread.