Thinkorswim (TOS) by TD Ameritrade is a powerful charting platform widely used by active traders. One of its built-in tools is the Fibonacci retracement, used to identify key support and resistance levels during market pullbacks.
In this guide, you’ll learn exactly how to set up and use Fibonacci retracement on Thinkorswim with step-by-step visuals and practical tips.
✅ Step 1: Launch Thinkorswim and Open a Chart
- Open your Thinkorswim platform
- Navigate to the Charts tab
- Select the asset you want to analyze (stocks, forex, futures, etc.)
- Choose your preferred timeframe (e.g., 1H, 4H, Daily)
✅ Step 2: Select the Fibonacci Retracement Tool
- Right-click anywhere on your chart
- Hover over “Add Drawing”
- Choose “Fibonacci Retracement” from the drawing tools list
Or use the shortcut icon (diagonal line) on the chart drawing toolbar.
✅ Step 3: Draw the Retracement
- In an uptrend: Click at the swing low, then drag to the swing high
- In a downtrend: Click at the swing high, then drag to the swing low
The levels will auto-populate on your chart with default settings.
✅ Step 4: Customize Your Fibonacci Levels (Optional)
- Right-click the Fib drawing
- Select Edit Properties
- Adjust the following:
- Add or remove levels (23.6%, 38.2%, 50.0%, 61.8%, 78.6%)
- Display price values next to the levels
- Change color, line thickness, or style for better visibility
- Save as a default drawing set for faster reuse
✅ Step 5: Use Fibonacci Levels for Trade Planning
- Watch for pullbacks into the 38.2%, 50%, or 61.8% levels
- Confirm with price action: candle patterns, RSI, MACD
- Plan entries, stop-loss, and take-profits based on level behavior
Example
If a stock rallies from $80 to $120:
- 38.2% = $104.72
- 50.0% = $100.00
- 61.8% = $95.28
If price pulls back to the 50% level and shows bullish confirmation, it may be a buy zone.
Bonus: Add Alerts
To monitor Fibonacci levels:
- Right-click a Fib line
- Choose “Create Alert”
- Set condition (e.g., price crosses 61.8%)
- Select notification type (popup, email, SMS)
Final Thoughts
Using Fibonacci retracement on Thinkorswim allows you to identify key price zones and make informed trading decisions. The tool is fully customizable and integrates well with other indicators and alert systems on the TOS platform.
It’s a must-use for traders who rely on structure and precision in their strategies.
✅ FAQs
1. Is Fibonacci retracement built into Thinkorswim?
Yes, it’s included in the standard drawing tools.
2. Can I save custom Fibonacci settings?
Yes. Edit properties and save your preferred setup as default.
3. Does Thinkorswim offer Fibonacci extensions too?
Yes. Use the “Fibonacci Extension” drawing tool from the same menu.
4. Can I use Fib levels for intraday trading?
Absolutely. The tool works on all timeframes including 1-min and 5-min charts.
5. Can I set alerts on Fib levels in Thinkorswim?
Yes. Right-click the level and choose “Create Alert” to get notified.
