What Is Tradestation?
Historically, TradeStation has served to wealthy, skilled, and active traders. The company's long-term goal is to expand its appeal and range through price changes and innovative offerings. TradeStation had a productive year in 2019, purchasing and relaunching YouCanTrade, a company devoted to education and community, as well as releasing TradeStation Crypto Inc., a cryptocurrency brokerage. In addition, the Florida-based brokerage unveiled its TS GO pricing strategy, which provides reduced prices for trading options and futures. Let's look into how these developments have impacted TradeStation's rating in an increasingly competitive online brokerage market, and whether they're sufficient to make TradeStation the best option for your investing needs.
- The platform's core strength is technical analysis and statistical modeling of trading strategies.
- Customers who exclusively use the smartphone app will profit from TradeStation's free trade offering, TS GO. Customers with TS GO could use the downloadable TradeStation 10, but they must pay a price to place a trade.
- TradeStation's desktop interface provides a range of useful tools, the opportunity to backtest trading techniques, and the ability to use add-on apps from third parties as well as TradeStation developers available in the TradingApp store.
Who Is TradeStation Intended For?
TradeStation's dedication to exemplary customer service, as well as its focus on high-quality market data and trade executions, make it an excellent option for the active trader or intermediate level trader looking to develop their skills. Its systems are reliable and remain operational even through periods of high trading volume. Overall, TradeStation has worked hard to make itself more appealing to the average customer, but the platform is more oriented toward the active, technically-minded trader.
- The platform is highly stable; TradeStation records 99.999 % uptime over the last year, and it operates flawlessly even through times of high volatility.
- It has a well-deserved reputation for providing superior charting and technical analysis tools.
- TradeStation's portfolio analysis feature, Portfolio Maestro, provides predictive analytics to help you refine your trading strategies. Find out what is working and keep it going, or figure out what isn't and repair it.
- It will take some time to learn how to use the TradeStation platform very well to build your own trading system. Though the development language is called EasyLanguage, it is not especially simple to learn.
- You must go to a different website to access TradeStation's education services, which are provided by its current affiliate, YouCanTrade. Similarly, the AI-powered help app TSbot isn't very useful.
- Fixed income trades must be placed with a live trader, and international trading is not open. Futures, options on futures, and bitcoin trading are not available on the main platform.
The usability of TradeStation has improved over time. TradeStation updated the account opening process in 2019 and optimized it as far as technically practicable (six steps), with your success clearly shown. On the same day that you open and finance an account, you will begin trading equities and options.
Clients will use one of three TradeStation platforms: the flagship downloadable TradeStation 10, a browser-based platform with much of the features of the downloadable product, or a full-featured smartphone app. Trading Technologies has a different forum for futures traders called FuturesPlus. TradeStation 10 can be thoroughly customized, and the web platform offers flexible customization options as well. If you have a preferred analytical platform, you can quickly see if it is compatible with TradeStation.
The smartphone app provides access to all asset groups that a customer is qualified to trade. Watchlists are shared between the internet and smartphone applications, but TradeStation 10 watchlists are saved on your local device.
After signing into either the downloadable platform or the online platform, the first screen you'll see is TradeStation Today, which contains featured videos, access to workspaces, the broker's Twitter account, and an economic calendar. The online platform includes the majority of the toolset of the downloadable platform, but it is a little simpler to use thanks to its tabbed style, which simplifies several of the menu-based navigation. Across TradeStation, all data is delivered in real time. Trades may be positioned, adjusted, and cancelled using charts or keyboard shortcuts. Matrix is TradeStation's trade ticket, and it is able to adapt to the asset type you're trading. Hovering the mouse over a bid or ask price brings up a trade ticket, which you can change before submitting the order.
TradeStation 10's workflow can be tailored to your needs, but there is a simple procedure to follow from analysis to trading. Watchlists can be customized and provide helpful information as well as links to order tickets. Conditional orders and bracket orders are available on both platforms, but the desktop platform includes additional specialized order forms, such as trading algorithms that check out liquidity for equities and options. TradeStation connects to about 40 equities, options, and futures trading centers, though some data needs a separate subscription fee.
Mobile Trade Experience
The first screen you'll see after signing into the TradeStation mobile app is dedicated to watchlists. The web and smartphone apps both support various watchlists that can be spread between the two platforms. You will drill down into each item on the watchlist by clicking the relevant icon to display charts, news, and trade. The opening screen can be adjusted to show both balances and positions.
The Tradestation app has a relatively simple workflow, and the majority of trading procedures were rational. Trading options on the mobile app is simple; reversing or rolling an options strategy takes just a few taps.
There is a TradeStation Crypto software for that asset class that helps users to position trades and monitor their balances.
Variety of Offerings
TradeStation has a wide variety of assets including those that are less common, such as cryptocurrencies. Online trading in stocks, options, futures, and futures options is available with TradeStation. Clients may trade cryptocurrencies from a different organization, TradeStation Crypto, although these features are not completely integrated. TradeStation, unlike some of its bigger competitors, does not have a robo-advisory service. TradeStation Crypto can be a cryptocurrency trading platform (not integrated). Customers will move cryptocurrencies into and out of their personal wallets.
Conditional orders and bracket orders are available on all TradeStation services, with the TradeStation 10 app offering additional specialized order types and algorithms. Clients will position basket orders and queue up several orders to be processed at the same time.
You will adjust the default tax lot relief method allocated to your account for each asset type exchanged (stocks, futures, etc.) in advance of the trade by using the Gain/Loss Tax Management function in the Client Center. You may change the tax method after a trade is placed but before it is settled by using the Gain/Loss Tax Management function. Other changes necessitate speaking with a live broker.
Based on the order and market conditions at the moment, TradeStation's smart order router combines features of both spray and sequential order routing methodologies. These methodologies are essentially based on the assumption that what is reflected in the market depth (price and size) is what is currently available, despite the fact that there is significantly more liquidity due to hidden orders and dark pools, and thus there is room for price development and enhanced execution performance. Based on this, TradeStation uses logic designed to scope out and absorb as much price change and hidden size as possible in a fair amount of time.
The TradeStation platform was created as a technical analysis mecca, complete with tools for creating a trading system based on the customer 's demands. Backtesting techniques on many decades of historical data was part of this. Backtesting is already a strong suit for TradeStation, and it has introduced additional tools to help you refine your trading strategy even more.
With a reputation of pleasing to regular traders, TradeStation has a variety of pricing plans upon which to select. The most recent plans have some free trades, while the older plans have discounts for highly regular traders. After the fall 2019 price-cutting frenzy, Tradestation launched two new product plans, all of which have commission-free stock trades and options trades for no per-leg charge. The other plans, which are slightly more complicated, all include per-share or per-contract charges that are tiered based on trading frequency in and asset class. The full information can be found on TradeStation's pricing website.
- For the first 10,000 shares of an order, TradeStation charges no fees on internet bonds, ETF, or OTCBB (penny stock) transactions. A $0.005 per share tax is levied on shares in excess of 10,000.
- For options transactions, there is no per-leg commission. Commissions are $0.60 per contract ($0.50 for TS GO).
- A 50-contract option order costs $30.00 ($25 for TS GO).
- A 500-share covered call trade plus five contracts will cost $3.00 ($2.50 for TS GO).
- The mutual fund commission on funds that are not part of the No Transaction Fee plan is $14.95.
- Fixed income trades are $14.95 plus $5 per bond when put with a live broker. This is higher than the average for brokers who facilitate fixed-income trades.
- As of January 2020, the margin interest rate varies from 9.5 % for balances under $10,000 to 8.75 % for balances above $100,000. This is about average overall, but it is particularly strong for brokers who cater to regular traders. Customers with margin debt in excess of $2 million pay 3.5 % interest.
- Transaction costs for futures contracts are $1.50 per contract per side, plus exchange fees ($0.85 for TS GO). Please keep in mind that this is a different account from the equity and options brokerage.
- Cryptocurrency charges are calculated based on the customer's account balance which range from 0.50 % of the exchange value for clients with less than $100,000 to 0.125 % for clients with more than $1 million. Clients with more than $100,000 in their accounts are eligible for free liquidity trades. Please keep in mind that this is a different account from the stock and options brokerage.
- The price of transferring an account is $125. When transferring an IRA, a $35 custodial fee and a $50 IRA termination fee are added.
- A wire transfer costs $25 domestically and $35 internationally. There is no fee to send a paper check.
- The charge for voluntary reorganization for corporate actions is $50.
- Paper statements costs $1 per page. Trade confirmations costs $1 per page as well.
- The live broker price is $50 per trade, regardless of asset type.
- The monthly inactivity charge for TS SELECT and TS GO accounts is $50, which is forgiven if the customer has an overall end-of-month balance of more than $2,000 or has made at least five trades in the preceding 12 months.
How This Broker Makes Money From You and for You?
Many online brokers' market strategies have been altered as a result of the demand to charge no fees. In the absence of commissions, the way brokers make money from you is less apparent, as are some of the hidden ways they make money for you.
Interest on cash: TradeStation, like most brokers, earns interest on the disparity between what you are paying on idle cash versus what they will gain on client cash deposits. Clients of TradeStation do not gain interest on empty assets, so this is just profit for TradeStation. To transfer funds into or out of a money market fund, contact the trade desk. Clients of TradeStation Crypto earn interest on cryptocurrency deposits in the funded coins (Bitcoin, Bitcoin Cash, Ethereum, Litecoin, USDC, and XRP). Cryptocurrency interest accrues daily and is charged monthly.
Payment for order flow: Many brokers earn money by taking payments from market makers in exchange for steering their customers' stock and options orders to those trading venues. This is referred to as reimbursement for order flow. On stock contracts, TradeStation accepts an average of $0.0018 per share in PFOF and $0.41 or less per deal on options trades. These premiums are lower than the industry average for online brokerages.
Price improvement: TradeStation's order router looks for liquidity and price improvement when performing the order in a timely manner. On average, TradeStation stock orders receive $0.005 per share in price improvement and options orders receive roughly $4 per contract. The latter is very strong and advantageous to option traders who use the platform.
Stock lending programs: create interest for brokers when the stock in the account is loaned to another trader or hedge fund, typically for the purpose of selling the stock short. TradeStation offers a Fully Paid Stock Lending service to customers, where they share 30% of the income with the customer who owns the stock. To take advantage of this, you must have a minimum account balance of $25,000 in order to qualify.
Portfolio margining: TradeStation does not include portfolio margining, which will reduce the amount of margin required depending on the computed total risk. It's shocking that portfolio margining isn't available, given the excellent risk management capabilities incorporated into the platforms. Portfolio margining is often most effective for customers who exchange derivatives to mitigate the risk implicit in their stock positions.
Given TradeStation's history as a technical analysis platform, it provides some excellent research tools. The majority of the tools place an emphasis on technical triggers through charting functions.
Stock and ETF Screeners
RadarScreen and Hot Lists allow highly precise scanning. You have the option of screening on technical or fundamental data. There are hundreds of pre-programmed screeners in the TradeStation 10 platform, or you can build your own. Based on more than 180 scientific and fundamental parameters, RadarScreen allows you to build a list of up to 2,000 stocks that you can constantly watch in real-time. It's one of the most effective stock and ETF screeners available from any online brokerage.
The OptionsStation Pro toolkit enables you to create, review, and monitor virtually every technique you can think of. It provides visual representations of options chains that allow you to see the break-even likelihood of your plan over a range of expiration dates. Hot Lists can also be used to search options and opportunities.
Mutual Fund Screener
Since this isn't a fund-focused broker, the scanner is rudimentary—especially in contrast to the stock, ETF, and options screeners.
Fixed Income Screener
On TradeStation, you'll find a pretty simple fixed income screener, but you'll have to contact a broker to position a trade. Investors seeking more specific screening requirements should search elsewhere if they are solely interested in fixed income.
Tools and Calculators
TradeStation does not include the usual calculators seen on other websites, such as those dedicated to retirement plans. Its instruments, such as time and sales, market depth, and screenshots that display how the positions are doing, are all targeted toward active traders.
Idea Generator for Trading
Hot Lists can be accessed via all platforms, including phones. The RadarScreen on TradeStation has limitless sorting and scanning options. To further filter and view, open a hotlist inside RadarScreen. Trading idea notifications are produced by the Trader Concierge feature.
The TradeStation 10 portal includes a News tab on the right side of the screen that can be configured to display a headline only or a headline and an accompanying graphic. You can stream news by symbol linking positions and watchlists, or you can filter news by subject, such as energy or cannabis. The TradeStation Today page shows general business content. TradeStation Industry Insights, the company's in-house market commentary, is available on the desktop platform and is updated five to ten times per trading day.
The TradeStation services have small third-party analysis, but you can access to software and research via the Trading App Store. However, the majority of these add-ons come at an extra expense. There are no analyst reports either.
In all of its sites, TradeStation provides cutting-edge charting capabilities. TradeStation 10 has exceptional charting capabilities focused on tick data. The charting kit includes automated technical analysis, which displays technical patterns on the charts as they develop. Web charting has been significantly improved and now provides all streaming real-time data as well as the option to include overlays and various indicators. Web charting features are more similar to TradeStation 10, with a new toolbar that allows you to change timeframes, drawing resources, sessions, and types. Background dragging and on-chart controls to zoom in/out, scroll left/right, switch to the most recent bar, and reset the chart selection are also available in web charting. Trading directly from a chart is possible, as is previewing a closing bracket order on a chart. By dragging and lowering closing price targets into the chart, the order ticket may be changed. This is one of the best charting apps available from any broker, and it stands out in particular for how easily it integrates with TradeStation's order management system.