How to Draw Support and Resistance Lines in Thinkorswim

Drawing support and resistance lines is a fundamental technique in technical analysis used by traders to identify potential price levels where an asset might experience a change in direction. In the Thinkorswim trading platform, you can easily draw these lines to aid in your trading strategy. Here's a detailed guide on how to do it:

1. Open Thinkorswim and Access the Charts

First, ensure you have Thinkorswim open and logged into your account. Navigate to the Charts tab, where you'll be able to visualize price movements and apply various technical indicators.

2. Select the Drawing Tools

On the top toolbar of the chart window, locate the drawing tools menu. This is typically represented by an icon that looks like a pencil or a line. Click on this to open the drawing tools dropdown menu.

3. Choose the Line Tool

From the dropdown menu, select the "Trend Line" tool. This tool is used to draw both support and resistance lines. Click on it to activate it.

4. Draw Support Lines

To draw a support line, click on the lowest point on the chart where the price has previously bounced upwards. This is typically a point where the price has repeatedly found buying interest. Drag the line horizontally to extend it across the chart, ensuring it intersects at other significant low points.

5. Draw Resistance Lines

For resistance lines, click on the highest point on the chart where the price has previously reversed downwards. This is a point where the price has faced selling pressure. Drag the line horizontally across the chart, extending it to other significant high points where the price has struggled to move higher.

6. Adjust and Refine Your Lines

After drawing the initial support and resistance lines, you may need to adjust them for accuracy. Click and drag the endpoints of the lines to align them more precisely with key price levels. Use the properties menu to customize the line style, color, and thickness if necessary for better visibility.

7. Save and Analyze

Once your lines are accurately placed, save your chart layout. Analyze the support and resistance levels to make informed trading decisions. Look for price patterns and potential breakouts or reversals at these levels.

8. Using Additional Tools

Thinkorswim also offers additional tools like Fibonacci retracements and trend channels that can complement your support and resistance analysis. Explore these tools for a more comprehensive analysis of price movements.

By following these steps, you can effectively use Thinkorswim to draw and utilize support and resistance lines in your trading strategy.