better to use mark or last for alerts in tos

Neter

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22-11-2024

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Thinkorswim Alerts: MARK vs. LAST – Which is Right for You?

Choosing between "MARK" and "LAST" price for alerts in Thinkorswim can significantly impact your trading strategy. Understanding the nuances of each is crucial for receiving timely and accurate notifications. This article will break down the differences, helping you select the optimal setting for your specific needs.

Understanding Price Types in Thinkorswim Alerts

Thinkorswim offers several price types for setting alerts, but MARK and LAST are the most common. Let's define each:

• LAST: This refers to the most recently traded price of the instrument. It's the price you see displayed on your chart in real-time. Alerts based on LAST price are triggered immediately upon a trade occurring at or beyond your specified level.

• MARK: This is a more complex price, representing the midpoint between the current bid and ask prices. It's a theoretical price and doesn't necessarily reflect an actual trade. Alerts triggered by MARK prices are less prone to "false positives" caused by fleeting, non-representative trades, especially in illiquid markets.

When to Use LAST Price Alerts

LAST price alerts are ideal when you need immediate notification of a price change, even if it's a fleeting one. Here are some scenarios where LAST is preferred:

• Fast-moving markets: In highly liquid markets with frequent trading activity, using LAST ensures you catch every significant price movement quickly.

• Scalping and day trading: For short-term strategies, the speed of LAST alerts is essential for timely entry and exit decisions.

• Price breakouts: If you're trading breakouts, the immediate notification of LAST helps you capitalize on price movements as they happen.

When to Use MARK Price Alerts

MARK price alerts provide a smoother, more stable trigger point, making them better suited for specific trading situations:

• Illiquid markets: In markets with less frequent trading, LAST prices can fluctuate wildly. MARK offers a more consistent and representative price level for triggering alerts.

• Swing trading and longer-term strategies: For these approaches, the slightly delayed notification of MARK is less crucial, and its greater stability prevents premature alert triggers due to noisy price action.

• Avoiding false signals: MARK's reliance on bid/ask averages reduces the chance of alerts triggered by outliers or temporary price spikes that might not reflect the underlying trend.

Comparing LAST and MARK: A Table Summary

Choosing the Right Alert Type for Your Strategy

The best choice – LAST or MARK – depends entirely on your individual trading style, the market you're trading, and your risk tolerance. Consider these factors:

• Your trading timeframe: Are you a scalper, day trader, swing trader, or long-term investor?

• Market liquidity: How often do trades occur in the asset you're watching?

• Your tolerance for false signals: How important is it to avoid unnecessary alerts?

Experimentation is key. Try both LAST and MARK alerts on the same instrument and compare the results. Observe which setting better aligns with your trading objectives and risk profile.

Conclusion

Thinkorswim's alert system provides flexibility with its LAST and MARK price options. By understanding the nuances of each, you can significantly improve the effectiveness of your alerts and, ultimately, your trading performance. Remember to carefully consider your trading style and market conditions before making your selection. Continuous monitoring and adjustment of your alert settings based on market behavior will further optimize your trading experience.