TradeStation Review



TradeStation is a well known broker amongst the trading community; they’re renowned for their professional style platform, speed of execution and reliability.

This can seem tempting if you’re new to trading and looking to graduate from one of the smaller brokers that specialize in beginners to a more professional style broker.

But is TradeStation a step too far? We signed up for an account with them to try out their service for ourselves. I must admit I’m looking forward to trying out their platform for myself having heard so many rave reviews about it.

Fees & Commissions

  • Stocks and ETFs Flat-Rate Plan: 1 to 9 trades/month – $9.99/trade; 10 to 29 trades/month – $7.99/trade; 30 or more trades/month – $6.99/trade
  • Stocks and ETFs Per-Share Plan: first 500 shares $0.01 per share, $0.006 per share thereafter, $1 minimum per trade
  • Options: $1 per contract with no ticket charge and no minimum
  • Futures: 25¢ – $1.20 per side, per contract + exchange, regulatory & overnight fees
  • Mutual funds: $14.95
  • Bonds: $14.95 plus $5 per bond
  • T-Bills: equities – $50, futures – $10
  • OTCBB: $9.99 (100,000 share position maximum)
  • Pink Sheet Stocks: $9.99 (100,000 share position maximum)
  • Investment products: stocks, options, mutual funds, bonds, futures, T-Bills, OTCBB, Pink Sheet Stocks, Forex, ETFs
  • Minimum to open account: $5,000 for non-daytraders and $30,000 for daytraders

Website & Sign-up

TradeStation have an excellent website, one of the best from an online broker’s perspective. They’re not a large company but they have clearly invested a significant amount of money in their website.

It’s both easy to navigate and nice to look at, the text is clear and easy to read and the whole site is totally intuitive. There is no clutter so finding what you’re looking for couldn’t be simpler, I wish all brokers sites were like this one.

Opening an account couldn’t be simpler; they offer just one account which allows you to trade multiple markets. I completed the forms in less than 10 minutes and transferred my money straight away, job done.

Trading Platform & Tools

TradeStation Platform

This is the bit we’ve all been waiting for, its time to get our hands on the TradeStation platform for the first time.

TradeStation are a direct access broker aimed at higher level intermediate traders and professional day traders, so naturally they offer full Level 2 data access.

All direct access brokers charge platform fees, the fact is Level 2 data is not cheap so you’re going to be charged a fee for using it. Usually this fee is reduced depending on the amount you trade.

In the case of TradeStation, if you trade at least 5000 shares in a month the platform fees are waived entirely. This is a lot of shares for a smaller investor so you need to take that into account before you make a decision, otherwise you’ll be hit with $99.95 simply for use of the platform.

On top of that there are significant market data fees to consider, although relatively cheap in isolation starting at $2.0 a month for S&P 500 stocks, they mount up the more data plans you add. This is not trading on a budget.

The actual platform itself is excellent as expected, it’s both powerful and intuitive which is unusual for a platform with this kind of functionality. To get the best out of it you do really need to read the very comprehensive manual but executing basic trades is easy.

TradeStation offer one platform that enables you to trade all markets including Forex, its fully customizable so you can set it up exactly the way you like it.

One especially neat feature is 27 years of market data; this means you can back test your strategy with confidence, add to that some excellent charting software and one click trading and you have a world class platform that’s both very comprehensive and easy to use, if a little expensive.

Pros

  • Great trading platform
  • Trading modeling functionality
  • Lots of investment products to trade
  • Active online community

Cons

  • Somewhat high stock and ETF commissions
  • $99.95 fee to use TradeStation Platform if not traded at least 5,000 shares in previous month
  • Lots of fees for market data
  • $35 annual IRA fee
  • Steep learning curve: trading platform is too complicated for beginner investors
  • Minimum amount to open account is $5,000 for non-daytraders and $30,000 for daytraders

Summary

TradeStation are a good broker no doubt about it, they have a world class platform that’s up there with the very best.

However they’re certainly not suitable for everyone, their expensive platform fees and added data fees make them a very expensive broker for anyone who isn’t trading in significant volume.

So that rules them out for most intermediate traders who’d be much better off using OptionsHouse who offer cheaper trades whilst still having an excellent platform, they don’t offer level 2 data but you still get some pretty sophisticated tools free of charge.

Beginners are not at all well suited to TradeStation, their platform is overkill for what a beginner needs, which would be fine if it were free but its not. Also their training is not suitable for beginners being aimed at much more experienced traders.

If you’re a beginner you’d be much better off joining either Zecco or TradeKing who both have excellent training materials aimed specifically at rookie traders and world class trading communities for you to learn from.




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