TradeStation Review

TradeStation Review

Since becoming a brokerage in 1982, TradeStation has prided itself on being a leader in trader technology and having one of the most robust platforms available anywhere to traders. After celebrating its 30-year anniversary in 2012, TradeStation continues that effort in 2013.

Platforms & Tools

TradeStation's desktop platform is its flagship product and core focus. Web trading has been introduced as of early 2013, however, its current use is primarily for placing trades alongside managing orders and positions when the desktop application is not within reach.

Multi-monitor traders will appreciate TradeStation’s flexibility in supporting multiple monitors, allowing each monitor to have its own desktop workstation open.

TradeStation’s tools cater to every type of professional investor, including institutions such as hedge funds. More than 40 years of historical data are available for equities trading when it comes to charting and studies. Backtesting through Portfolio Maestro and customized scanning of the market for opportunities are just the tip of the iceberg as far as functionality goes.

Charting allows investors to go deep into analysis, customizing indicators with numerous options, something only competitors like TD Ameritrade's thinkorswim platform can compete with. More than 200 indicators/studies are available for inclusion, and each one can be reworked or adjusted to the trader's exact specification. 

Options traders are not forgotten either, thanks to OptionStation Pro, a built-in tool within the platform. Analyzing potential trades is a breeze, and traders can view traditional 2D as well as 3D profit & loss (P&L) charts, something exclusive to TradeStation. While the 3D views were a nice plus, ultimately, they felt more like eye candy.

Other tools in the TradeStation arsenal include Radar Screen, Scanner, Matrix (ladder trading) and Walk-Forward Optimizer, among others.

One last important piece of TradeStation's tools offering is its EasyLanguage, TradeStation's own proprietary coding language that allows traders to run wild with indicator and trade strategy customizations. Clients can share and sell their work via the TradeStation Strategy Network. Some products are offered for free, while others can run $500 per month or more.

Commissions & Fees

While TradeStation does offer support for all trading types, including forex and futures, this review focuses on TradeStation's equities and options offering. Note: Mutual funds are not supported for trading through the platform and must be phoned in.

TradeStation, like MB Trading, Interactive Brokers, Lightspeed and others, requires clients to purchase real-time data feeds for every exchange they wish to trade. For example, if clients wish to trade equities in the NASDAQ, NYSE and AMEX, the price would be $3 per month ($1 + $1 + $1, respectively). Level II quotes run $11 per month, and so on.

The main fee all new clients should be aware of is the $99 monthly charge for the TradeStation software, which can only be waived if certain activity levels are hit or the client has more than $1M in assets. For equities traders, at least 5,000 shares per month must be traded, and for options traders, 50 contracts are necessary to avoid the fee.

A full breakdown of TradeStation's commissions & fees structure can be seen via the Commissions & Fee tab above. Overall, TradeStation has a very competitive commissions schedule when pitted against large, full-service brokers (TD Ameritrade, Scottrade, ETRADE, Charles Schwab, Fidelity), but is more expensive than some of its close competitors like Lightspeed and Interactive Brokers.

	TradeStation	Interactive Brokers	Lightspeed Trading	MB Trading	TD Ameritrade
Stock Trades	$9.99	N/A	$2.25	$4.95	$9.99
Options Base	$0.00	$0.00	$0.00	$0.00	$9.99
Per Contract	$1.00	$0.70	$0.60	$0.95	$0.75
Commissions, Fees

One last important note: TradeStation does not accept payment for order flow, nor does it pass on market rebates to its clients. The only broker to completely avoid market rebates, TradeStation's philosophy focuses on no hidden costs, alongside achieving price improvement through sophisticated routing techniques. Unfortunately, there is not enough data to verify whether or not this is ultimately a net savings to clients, versus hand-picking the route and receiving the market rebate for adding liquidity.

Customer Service

During our testing, we found TradeStation's phone support to be slightly above average, its email support to be slightly below average and its live chat support to be below average. 

TradeStation's phone support was the strongest, and for good reason — broker reps were always quick to pick up our calls and were, overall, well trained. Compared to other active trader niche brokers, TradeStation was among the best in the phone service category. Only Cobra Trading, which finished second overall in this year's 2013 Online Broker Review, was stronger.

TradeStation finished just outside the top 10 for customer service.

Other Notes

TradeStation offers little research and, as a result, is not recommended for this category (like all active trader niche brokers). 

The broker does offer a new browser-based platform called TradeStation WebTrading. New as of early January 2013, we found the platform to be similar to what Interactive Brokers offers with its own browser accomplice platform, which is an easy way to place trades and monitor positions. However, we were extremely impressed with the cleanness and overall quality. During our testing we found WebTrading to be bug free, easy-to-use and, overall, we feel it has significant potential for later expansion. 

For mobile trading, we found TradeStation to be just okay when we tested the iPhone app. The app was easy-to-use, however, it lacked some core functionality we would expect from TradeStation, such as technical indicators for charting. It is a well-built, bug-free app, but based on TradeStation's reputation as a powerhouse platform provider, we were left wanting more.

Concluding Thoughts

With more than 30 years of experience under its belt, TradeStation is a leader and innovator in its offering of a full-feature trade platform and high-power trade tools. Its appeal to active traders and professional investors is rivaled by only a select few.

While not a broker for everyone, especially new investors, its place in the realm of online brokers is not going anywhere. With full effort put behind its web-based and mobile-based platforms, 2013 could be TradeStation's biggest year of development yet.