TradeStation is not your typical discount broker. While almost anyone can open an account and start trading with many of the online brokerages reviewed on this site, TradeStation targets a different demographic and type of trader.
What makes TradeStation different is their focus on serving the needs of highly active traders or those who trade options, futures or forex regularly. If you’re an active day trader or a professional investor, then this TradeStation review should help you determine if they’re the best online broker for your needs. If you’re not a very active trader and prefer passive, long-term investing strategies, then make sure to check out some of our other discount brokerage firms that are likely to be a better fit.
TradeStation is one of the foremost brokerages in their niche. Having been around for a little over 30 years TradeStation can go toe to toe with some of the other brokers in the space – from Interactive Brokers, Ninja Trader and more. One of the main features that sets TradeStation apart is their EasyLanguage system that allows traders to completely customize their trading environment. The EasyLanguage platform lets you trade like a professional.
Offering such a highly advanced platform begs the need to offer stellar service. TradeStation does not disappoint in this area. TradeStation has been recognized by Barron’s as having the best platform for frequent traders, best for options traders and best for international traders. If those accolades aren’t enough, they’ve also been recognized for similar awards by Kiplinger’s, Investor’s Business Daily and more.
TradeStation offers the typical account types, including IRAs, Corporate accounts, and Trusts. If you’re interested in opening an account with TradeStation, they come in with a minimum of $5,000 or $30,000 if you’re a Pattern Day Trader. While this is higher than most other discount brokerages, you have to be a very specific kind of investor to work with TradeStation.
Pricing is important when it comes to choosing a discount broker. TradeStation does not disappoint when it comes to fees and pricing. TradeStation offers a number of different commission structures, but for stock trading they come in with a very fair $4.99 per trade or a tiered pricing of $.01 per share for 500 shares and $.006 per share after that.
TradeStation’s fees under their unbundled pricing option can be found below:
If you’re more interested in options trading, TradeStation is very competitive. Their options trading fees and costs can be found below:
Now that we have a brief look into TradeStation, let’s consider some of the features that come with a TradeStation account:
- Active community. Other discount brokerages, like Motif Investing, have an active presence on social media. TradeStation takes that to a whole new level by offering active, forum based communities that provide a great opportunity to get real-time feedback from other active traders. Not only can this be a great way to learn from other active traders but you can also help others in need.
- Futures/Forex trading. Not every online broker offers futures or forex trading, but TradeStation offers both, like Etrade. Both trading options present unique challenges and risks but can be a great way to add to your investment strategy, provided you know what you’re doing. The futures pricing at TradeStation starts out as low as $.25 per trade and with forex they’re simply compensated on the spread.
- Extensive educational offerings. Many brokers offer free classes and tutorials, though TradeStation takes it to another level – which makes sense given their focus. TradeStation offers various academic programs, labs and events to help users further educate themselves on advanced trading strategies.
- Stellar platform. Most, if not all, brokerages tout their platform. TradeStation is no different. However, it should tell you something that many professional traders use the platform. Simply put, the customizable nature of TradeStation’s platform puts it atop others.
- Higher minimum balance requirement. This was touched on earlier, but TradeStation requires a higher opening balance of $5,000. This is on purpose and if you’re not an active trader then it will be of no real significance.
You should be able to see through this TradeStation review that the company is really one of the best discount brokers in the industry. Following are some of the reasons why you should consider opening a TradeStation account:
- The platform. A good platform can set a brokerage apart from the crowd. That is the case with TradeStation. If you are an active trader and want customization the platform is a convincing feature.
- Great commissions. TradeStation targets professional traders, and it shows in their commission structure. The more you trade, the lower your rate will drop – as low as $.002 per share!
- Direct routing. Not every online brokerage offers direct routing. Even if they do it’s not openly advertised. That is not the case with TradeStation. In fact, they encourage direct routing – which essentially allows you to bypass the broker and deal directly with the market maker for a specific security.
- Superb community. As an active trader you want access to information without waiting for it. The forum community and customer service support offered by TradeStation gives investors an advantage. The two together are a powerful resource.
- EasyLanguage. EasyLanguage is really what makes TradeStation unique compared to other online brokers. At no other brokerage are you able to have the level of customization that EasyLanguage offers. While there is a learning curve to it, it’s highly powerful.
No discount brokerage is perfect and such is the case with TradeStation. Some of the drawbacks to TradeStation are:
- Monthly fee. Fees can eat at the performance of a portfolio and should be avoided when at all possible. TradeStation charges a $99 monthly fee – but only in a specific circumstance. If you trade less than 5,000 shares or 50 option contracts per month then you be charged the fee. However, if you trade more than that then you will not be charged and this is nothing to worry about. The other fee to watch out for with TradeStation is the $35 annual fee on IRAs. However, if you’re a terribly active trader then you likely won’t be doing it with a retirement account.
- Mobile platform. With their focus and how well the web platform performs, it seems a bit odd, but the mobile platform at TradeStation leaves some wanting more. Whereas the robust web platform offers high customization, the phone app is a bit lacking. If that matters to you, then you may want to consider another broker.
- Higher minimum balance. As stated earlier, TradeStation requires a minimum of $5,000 to open an account. This may hold some back, but it really isn’t that much of a drawback as their target market is those who are very active and thus tend to have higher balances.
TradeStation Review – The Final Analysis
After going through this review of TradeStation it is easy to see that for the right individual they can be a great brokerage. If you’re an active trader, like to take advantage of options, futures or forex, then TradeStation could very well be the best discount broker for you.
You do have to deal with the monthly fee (though only assuming you might not hit the needed trading level to avoid it) and less than optimal mobile app, and those shouldn’t be overlooked. However, those aside, TradeStation offers many powerful features that set it apart from competitors. If you’re a highly active trader then TradeStation is worth a serious look.
As with many other online brokerages, TradeStation does offer a promotion for new accounts – in this case 90 days of free trading with new accounts. This allows you a solid three months to try them out and see if they meet your brokerage needs.
TradeStation offers a stellar platform for highly active traders. With trades as low as $.002 per share, TradeStation is hard to beat!