Latest posts by Marcio (see all)
- AnyOption Set To Merge With Invest.com - June 16, 2017
- 24option Implements MT4 Platform - February 17, 2017
- German Soccer Superstar Lothar Matthäus Signs deal with Stockpair - February 7, 2017
TradeStation was founded all the way back in 1982 as Omega Research Inc. by William and Rafael Cruz, two trading aficionado brothers. The brothers sold tools that allowed clients without a technical programming background to program and test their own trading strategies.
In 1991, the TradeStation platform was created and in 1994 they signed a licensing deal with Dow Jones Telerate and TradeStation was then offered as a premium service to Telerate’s institutional clients. In 1997, Omega Research was IPO-ed and listed on the Nasdaq National Market.
The first online TradeStation platform was launched in 1999 and in 2001 the company shifted its business model from trading software to online securities brokerage. It also took the name TradeStation for itself. Over the years the platform gradually added more and more features, which we will explain in later sections.
TradeStation Awards and Accolades
TradeStation is one of the most highly decorated online brokerages there is out there. Over the years, it has received numerous recognitions; here are some of the more recent ones.
In March 2017, it received 4.5 stars from Barron’s magazine for the ‘Best for Frequent Traders’ category (highest start rating 4 years in a row). It also received 4 stars for the ‘Best for Options Traders’ and ‘Best for Investor Education’ categories.
Named ‘Best Platform Technology’ in 2017 by Stockbrokers.com for the 5th year in a row. It also won the ‘Best in Class’ awards for the Platform & Tools, Active Trading, Options Trading, #1 Broker Innovation, and Customer Service categories.
Winner of ‘Best Trading System’ for both Stocks and Futures for the 13th year in a row, ‘Best Professional Platform’ for the 15th year in a row, and ‘Best Trading Centers, Schools, Training’ for the 3rd year in a row from the 2017 Technical Analysis of Stocks and Commodities.
TradeStation Products and Investments
TradeStation offers five general classes of assets that traders can trade in. They are:
- Stocks and Exchange Traded Funds
- Bonds and Fixed Income
- Mutual Funds
TradeStation Account Types and Minimums
TradeStation offers two different types of accounts: equities and futures. Equity accounts allow for the trading of stocks, ETFs, and options while futures accounts allow for futures trading.
There are two types of equity accounts; cash and margin accounts. Equity cash accounts have a $500 minimum deposit with no minimum daily equity balance. Equity margin accounts have a $2,000 minimum initial deposit and a $2,000 minimum daily equity balance.
Please note that equity margin accounts can also be categorized as either ‘Non Day-Trading Margin Accounts’ and ‘Pattern Day Trading Margin Accounts’. The former is restricted to only three opening transactions per day minus the number of day trades in the previous four days. You can still place as many closing transactions as you want.
Pattern day trading margin accounts are defined by FINRA rules as any account that places four day trades in a five-day trading period. Once such a series of transactions is made, that account is permanently considered a pattern day trading account and must maintain a minimum daily equity balance of $25,000.
If the account dips below that threshold, only closing transactions will be able to meet until the balance again passes the threshold. Futures accounts have a minimum initial account balance of $5,000, though for IRA accounts the minimum account balance is $5,500.
TradeStation also offers accounts not just for individuals; you can also open traditional IRA, Roth IRA, SEP IRA, Simple IRA, joint, corporate, trust, partnership, custodial, sole proprietorship, and LLC accounts.
TradeStation Platform and Tools
The TradeStation platform, available on both desktop and mobile is jam packed with features. There are almost too many to describe here so we will split them up according to the main objective of the various features. The main purposes of these features are to:
- Find Trading Opportunities: TradeStation offers four different tools for uncovering new trading opportunities: RadarScreen, Hot Lists, Scanner, and OptionStation Search.
RadarScreen is a real time market tracking tool that allows a high level of customization while Hot Lists are pre-set lists that show market movements such as ‘which symbols are showing unusual volatility’.
Scanner allows both pre-set and customizable scanning for stocks and ETFs with technical and fundamental analysis criteria built in; OptionStation Pro is like Scanner, but for options.
- Analyze the Markets: Not only does TradeStation offer extensive and customizable charting tools, it also allows users to back test trading strategies using historical data. It also has a ‘Walk-Forward Optimizer’ feature to test your trading strategies against yet-unseen market data, ensuring a more rigid testing process.
And using the Portfolio Maestro, entire portfolios can be evaluated using both back-testing and walk forward analysis. TradeStation is also connected with Reuters to give traders the latest research regarding specific equities, and in addition provides the latest relevant news sourced from over 45 authoritative sources.
For options, OptionStation Pro has the latest options analysis tools, enabling ranking by spread characteristics, dynamic pricing and Greek calculations, and interactive 2-D and 3-D position graphs.
- Execute Trades: TradeStation offers various options for executing your trades such as via a matrix system, via an order bar, via the charts, and a one click quick trade bar.
It also offers a trade simulator which is essentially a demo account that allows you to test your trading strategies in real time at no risk. You can also place your trades in baskets, to enable faster execution or even automate your trading according to your set strategies.
- Monitor Your Positions: TradeStation’s TradeManager feature allows for customizable analysis of your portfolio, with over a hundred performance fields and dozens of performance and trade graphs. Its Trade Allocation Tool also allows institutional clients and investment advisors to allocate them among their clients’ accounts.
- Extend The Possibilities: TradeStation is more than just a simple trading platform. Its EasyLanguage feature is its exclusive programming language that enables traders to modify indicators, create trading strategies, and even build and customize their own analysis tools. It also has TradingApp store which features hundreds of add-ons for the platform.
TradeStation Commissions and Fees
TradeStation’s fee structure is admittedly very complex. First let’s talk about its commissions, which vary depending on which product you are trading. Here’s a brief summary:
- Stocks and ETFs: $5 per trade. You can also elect to go for a per share basis which costs $0.01 per share and decreases to $0.006 per share after 500 trades.
TradeStation also offers ‘unbundled’ pricing which is a combination of the two. Depending on the number of shares executed per month, the commission per share varies from $0.002 to $0.01 while the commission per trade varies from $0.50 to $1.00.
Note that you can only change your selected commission structure once free of charge.
- Options: $0.50 per contract plus $5 per trade. However if you trade in small blocks, you can elect for a flat $1.00 per contract pricing.
- Futures: Pricing ranges from $0.25 to $1.20 per side depending on number of monthly contracts. Please note that exchange execution and clearing fees also apply.
- Other Securities: OTCBB and Pink Sheet securities cost $5 per trade. Mutual funds cost $14.95 per trade, and bonds cost $14.95 per trade plus $5 per bond.
TradeStation also offers its tools (TradeStation platform, RadarScreen, Portfolio Maestro, and OptionStation Pro) on a monthly subscription basis for those without a per trade equities account. Users who have a per trade equities account can access all four tools completely free.
For users opting for a per-share or unbundled equities account, the OptionStation Pro is still free, however the TradeStation platform, RadarScreen, and Portfolio Maestro will cost $99.95 per month, $59.95 per month, and $59.95 per month, respectively.
However, all of these monthly fees are waived if the accounts meet the minimum activity requirements which are 10 round-turn futures and/or futures options contracts or 50 options contracts traded or 5,000 shares traded or $100,000 account balance.
For people without a brokerage account altogether who simply want to use TradeStation’s trading tools, the TradeStation platform costs $249.95 per month ($299.95 per month for professionals) while the RadarScreen, Portfolio Maestro, and OptionStation Pro will cost $59.95 per month each.
TradeStation Education Center
TradeStation maintains an extensive education section which is divided into three categories: Labs, Events, and University. More details are provided below:
- TradeStation Labs: This is TradeStation’s market analysis resource. Sourced from both its in-house quantitative analyst team and third-party sources users can find everything from morning market briefings, trader interviews, and analysis concepts (such as how to use statistical and implied volatility in trading).
- TradeStation Events Center: This is TradeStation’s access point for its various webinars, which cover a whole range of topics from beginner to advanced.
- TradeStation University: This is TradeStation’s tutorial section and comprises video tutorials, quick tips, and ebooks covering everything from TradeStation basics to strategy trading.
In addition to the above, TradeStation also offers ‘Private Onboarding’ sessions for traders who want to familiarize themselves with TradeStation’s platform and tools as quickly as possible. This is a private one hour session, conducted online, and costs $149 per session.
Because of how advanced and customizable TradeStation is, it has a vibrant community of users who are able to help answer questions regarding the platform and also discuss various trading strategies.
There is a TradeStation Wiki, created by the community, which can be considered an in-depth FAQ of the platform. It also has highly active discussion forums, where you can discuss anything from trading automation, EasyLanguage, and strategy backtesting.
Is TradeStation Suitable For You?
After reading through TradeStation’s myriad features and pricing options, you may be wondering whether or not TradeStation is the right choice for you. Well, that would depend on who you are. As you can see, TradeStation is more suitable for the professional or highly experienced trader.
It is most definitely not a basic platform and people new to trading will likely find the platform too difficult to comprehend. Here is why TradeStation is best for the professional, frequent traders:
- Advanced Platform: TradeStation was designed by traders for traders. In its early history, it started out as a way to let traders back-test trading strategies and has retained that feature until today, setting it apart from the competition (and improving upon it with its Walk Forward feature).
Plus, its level of customization available by mastering its EasyLanguage programming is something that only advanced traders will be able to utilize.
- Volume Based Pricing: There’s a reason that TradeStation has won so many ‘Best for Frequent Traders’ awards; the more you trade, the cheaper it becomes. If you trade equities on a per share basis or futures, your cost is lower the higher your volume.
Further, you will also be subject to software subscription fees (which can add up to almost $280 per month) if you do not meet the minimum activity requirements which include an account balance of $100,000.
TradeStation is one of the most feature-packed platforms that we have seen. It was truly created by traders for traders and has everything a professional trader could want in a platform.
TradeStation’s main advantage over the competition is the level of customization possible once you master the EasyLanguage (or simply buy an app from the TradingApp store).
The level of customization possible can also be a drawback however for newer and less experienced traders. If you are still mastering the basics, you might be best served on a more basic platform.
Further, if you are an infrequent trader, TradeStation is also cost prohibitive due to its focus on volume based pricing. Simply put, if you are looking for a cheap and basic platform, TradeStation is not for you.
But if you are a frequent experienced trader looking for a one-stop platform for all your trading needs, then TradeStation might be the best choice for you.
- High level of customization.
- Real time data feeds and detailed analytic tools.
- Great for high activity traders.
- May be too complicated for the casual or beginner trader.
- Relatively high cost if you are not a frequent trader.
7 Binary Options review: TradeStation: 4 stars