How does factor investing fit into your particular trading world? Here are three factors
that could help you ponder.
• Momentum. A stable economy with sustained trends means you might stick with
what’s trendy, until it changes. Momentum
tends to be favorable when an economic cycle
is expanding, and one measure of momentum
is relative strength. When relative strength is
strong, the current trend still has room to grow.
• Minimum volatility. When growth is slow
and you need to play defense, get your minimum volatility gloves on. You’ll need them to
protect you from downside moves that could
surprise you in a future crisis. Think of this
factor as similar to investing in bonds—i.e.,
more defensive and somewhat more predictable.
• Value. Don your value shoes when the economy seems relatively “great.” Push aside recession fears and be prepared to take on more
risk. Don’t confuse this kind of value with a
traditional “value” fund, which is more like
finding last year’s trends at a bargain price. In
factor investing, value means you might look to
get in during a new trend’s early stages. “Factor
ETFs allow investors to be deliberate about
these exposures and may be used to express
views, complement exposures, and diversify
portfolios,” says Shores.
Above all, work harder to stay on top of market
pace—whether the markets are in slow mode
or growing quickly. Factors can help you tilt
your portfolio to take advantage of opportunities in the market.
When your wardrobe—er, portfolio isn’t
looking so great, it may be time to try something different. It’s best to be aware of and use
all the tools available to help you potentially
seek a positive return. —Words by JAYANTHI
Find New Trades
BIG IDEA: FINDING NEW TRADING OPPORTUNI-
TIES DOESN’T HAVE TO BE LIKE LOOKING
FOR A NEEDLE IN A HAYSTACK. GET CRE-
ATIVE WITH YOUR FILTERING TOOLS AND
FOCUS ON THOSE THAT MATTER.
TD Ameritrade and BlackRock are separate
and unaffiliated companies and are not responsible
for each other’s policies, services, or opinions.
Diversification does not eliminate the risk of
• It all starts at the Scan tab. The thinkorswim® Scan tab is a
powerful and diverse tool. It allows you to scan for complex
historical price analysis, make precise balance sheet queries, look for stocks that are trading at a specific price, and
include option contracts that have specific number of days
till expiration. There’s plenty more. Here’s a look at what
the scan tool can do for you. It may be just a peek, but you’ll
get the idea, and pretty soon you’ll get cozy with it. And once
you’ve come up with your scans, you can save them, use
them to auto-update watchlists, sort your scan outputs by
fancy columns, and create alerts when something is added to
or deleted from your scans. What are you waiting for? Gear
up and start scanning.
For the latest release
notes and thinkorswim
how-to videos, go to
Source: thinkorswim by TD Ameritrade. For illustrative purposes only.
GEAR HEAD • SEASONED
based on any of the
available columns in an
4 – Study filters are
a technical analyst’s
dream. This is where
charts meet the scanner.
You can add any available study or one you
have come up with as a
1 – Click the dropdown
menu under “Scan
in:” and select either a
group of symbols or a
2 – Stock filters can be
added based on price,
volume, and derivatives
of those data points.
3 – Option filters are
used to filter out single
options. You can scan
TAKE THE PLUNGE
The best place to begin
your scan is to first filter
through all the products you are looking
at. This is where the
Stock Hacker comes
in. It’s found under the
thinkorswim Scan tab.
5 – Fundamental filters allow you to scan
based on balance sheet
queries. You can open
up balance sheets for
all equities that report
6 – Once you have
selected all your filtering
criteria, hit the Scan