TradeStation

What Is TradeStation?

TradeStation is a financial technology company that helps investors trade various assets with lower fees. You can choose from stocks, ETFs, options, crypto, and more. Investors can access several features to identify which investment assets make the most sense for them.

Should You Use TradeStation?

If you want access to unique features so you can make the most of your investing without a slew of brokerage fees, then TradeStation is a great option. The brokerage services firm has many resources for active traders. The company has a healthy mix of beginner and advanced features, allowing users to customize their experiences.

TradeStation Platforms

With TradeStation, you aren’t limited to a single platform, such as always making trades from your phone or at your desk working from your computer. You can trade from several devices, and it’s also possible to trade several types of assets. Here’s a look at the available platforms that the broker provides:

Web Trading

As long as you can access the internet, you can use TradeStation’s web trading platform. The web trading platform includes several features, such as options chain analysis, streaming market data, hot lists, and more. Active traders can review technical studies and get real-time insights to increase the likelihood of profitable trades.

Desktop

You can use your desktop computer to access the TradeStation website and handle all your trades. The TradeStation Desktop feature does not require a specific type of browser. Investors can use the desktop version to monitor over 1,000 assets in real-time and monitor technical and fundamental indicators. TradeStation offers a streamlined experience for its users.

Mobile Apps

You can easily download TradeStation’s mobile app to your phone or tablet. The trading app is available for Android, Mac, and Google, so you can make trades from almost any location where you have a data stream. This makes it easy to trade on the go and get exposure to several asset classes.

TradeStation Features

There are many online trading companies that you can choose from, but the TradeStation’s features set it apart from the pack. Here are a few of the best features you get access to with an account.

Simulated Trading Mode

Trading stocks, crypto, and other assets in real time is difficult. Traders have to use technical analysis to quickly make trades. Long-term investors focus on fundamental analysis for their investments, but either strategy can result in significant losses. Beginners may be prone to more mistakes and can make emotional trades.

The TradeStation Simulated Trading Mode lets customers use imaginary money to invest in assets. Investors can either use the simulator to trade in real time or backtest their strategies. You don’t have to risk losing money and can make many mistakes along the way. You can learn the ropes and become more confident as an investor without losing a lot of money on beginner mistakes.

It is a good idea to trade riskier assets in the simulated trading mode before you commit to them with real dollars. Options prices, in particular, are extremely volatile and can expire worthless within a few days. Using a simulator first and keeping a daily journal where you write your thoughts can help you become a better investor and test ideas before you spend money on them. Since this money is imaginary, TradeStation lets you trade with unlimited paper trading dollars. There is zero risk when you use a simulator to buy assets, and you can hit the reset button at any time.

OptionStation® Pro

OptionStation Pro lets investors access what-if graphs, options chain analysis, and key data points that can help you make better single and multi-leg options trades. Customers can analyze current market trends to increase the likelihood of making profitable investments. The platform also shows you the probability of each trade, so you’re not guessing if trades have a high likelihood of success.

One hidden benefit of OptionStation Pro is that the firm has more affordable fees than other brokers. Each option contract only results in a $0.60 fee, while most brokers charge $0.65 per options contract. You get to save five cents on every contract that you buy or sell.

These fees add up each time you buy or sell an options contract, and the savings from OptionStation Pro can become significant. If you trade 1,000 options contracts each year, you will save $50 if you use OptionStation Pro for your trades. While 1,000 options contracts may seem like a lot, it can add up quickly. If you buy 10 calls and sell them for a profit later, you have incurred fees for 20 options contract transactions.

Matrix

TradeStation refers to the Matrix as the “Swiss Army Knife” of trading tools. This feature is a point-and-shoot order entry tool that makes it easy for you to see your orders and trades in a single location. It puts your orders in context with the current market. It gives customers a simple way to enter and change orders before placing them.

Strategy Back Testing

Are you wondering if your trading criteria will work? You can give it a try by backtesting your concept. Backtesting involves taking a trading strategy and applying it to past market conditions. If you created your trading strategy believing the stock market would encounter a recession, you can use backtesting to see how your strategy would have performed in 2008. You can go back to other years and pick more recent years to gauge how your strategy would have performed back then.

The TradeStation feature can help you assess your strategy and if it is viable in the future. Sound investment strategies often stand the test of time, but there are no guarantees. Just because a backtesting strategy worked in prior years does not mean it will work in the future. Changing market conditions and new economic events create new scenarios that will impact your strategy’s performance. You shouldn’t tweak your backtesting strategy for the sole purpose of getting strong returns in past cycles. However, you can test your idea and see if the returns are sufficient before applying your strategy in the present market conditions.

EasyLanguage®

This is a programming language designed for traders and investors. It makes it easy to create trading strategies and performance indicators. TradeStation customers can use thousands of keywords to access information quickly and evaluate assets.

RadarScreen

This is a tool that scans the market in real time, looking for trading opportunities that might be a good match for your needs. Investors can use over 180 technical and fundamental indicators to shortlist assets that meet their criteria. You can use RadarScreen to find ideal assets that align with your portfolio’s goals.

Additional Features

You want a trading platform with the best features, and TradeStation doesn’t disappoint. This TradeStation review has covered some of the company’s top features, but there is more to this platform. Here are some additional features to consider:

Research and Education

TradeStation offers many articles and resources that you can use to research trading and potential trading strategies or just learn more about investing. Using these educational resources can make you feel more confident about your strategy and increase the likelihood of becoming a successful investor.

Security

When you’re trading online and adding money to your account, you want to know that the website has the security necessary to protect your information. TradeStation offers outstanding security, with encrypted communications, advanced firewalls, and strict privacy policies. TradeStation also sends alerts about your account, such as changes to your login details, contact information, account settings, and more. The company employs anti-fraud and anti-money-laundering experts to look over the platform’s systems and customer accounts.

Customer Service

When you have questions or need help with the platform, TradeStation offers customer service to help you manage your account and answer vital questions. The platform gives users several ways to find answers to their questions. The company has an extensive FAQ page to get you started, but you can also enter a live chat with an assistant. You can also visit support forums to post questions and interact with the TradeStation community.

Trading Products

Many brokerage firms offer stock trading. While this is a standard feature, TradeStation goes above and beyond with its asset-class offerings. Investors can get exposure to various investment opportunities that can help them make the most of their investment funds.

Stocks, ETFs, and Mutual Funds

Stocks, ETFs, and mutual funds are great ways to invest. Stocks are liquid assets, and you can buy thousands of companies listed on public exchanges. Investors benefit from dividends and appreciation, and you can buy individual stocks based on their sectors, dividends, market caps, earnings growth, and other factors.

Buying individual stocks can lead to a custom-made portfolio that feels tailored to you, especially if you use parameters to guide your investments. However, managing a portfolio of many individual stocks can feel overwhelming. Other investors make the mistake of buying a small number of stocks, effectively putting all of their eggs in one basket.

Mutual funds and ETFs allow investors to diversify across more stocks. You can target funds based on sectors, market cap, cash flow, and other categories. Investors should look at the historical performance of these funds and their expense ratios before investing.

These assets have some risk and can lose value. However, they can also appreciate for long-term investors. Investors should assess their risk tolerance before buying assets, but TradeStation gives you plenty of choices.

Futures

With TradeStation, you can secure a contract and price to buy a stock or other investment product at a predetermined date in the future. Futures give investors exposure to several types of assets, such as crops, livestock, precious metals, and other alternative assets. Unlike options contracts, you cannot exercise futures contracts early. Futures contracts get exercised at expiration, but you can exit the position before the future contract’s expiration date.

Options

TradeStation can help you secure an option on a stock. Options allow the holder to buy or sell a stock at an agreed-upon price. These derivatives experience sharp price fluctuations and can expire worthless at the expiration date. Options trading is riskier than stock trading but has a higher potential reward. Options traders will benefit from the lower trading fees and advanced tools that TradeStation provides.

Crypto

You can buy cryptocurrency and digital assets through the TradeStation platform. This is a relatively new type of investment and can be volatile, but the results have been promising. So far, Bitcoin is up by over 80% year-to-date compared to the S&P 500’s meager 15% YTD gain. Cryptocurrencies function like digital gold, providing a unit of value regardless of inflation. The limited supply of Bitcoin works in its favor, as only 21 million coins exist.

Investors can trade several types of cryptocurrency instead of limiting themselves to Bitcoin. Large altcoins like Ethereum, Dogecoin, XRP, and Cardano can also yield high returns, but investors should be careful with altcoins. Some cryptocurrencies are pump-and-dump schemes. Cryptocurrencies that suddenly gain large momentum out of nowhere carry more risk than household names like Bitcoin and Ethereum.

Many traders gravitate to cryptocurrencies for their volatility. Traders make money from price swings, and they can enter long or short positions based on their preferences. This flexibility enables traders to profit from price increases and decreases as long as they correctly guess the direction. TradeStation provides resources that help traders analyze prices in seconds and initiate one-click order entries. TradeStation customers can only trade Bitcoin, Ethereum, and USDC on the platform. The company may include more cryptocurrencies in the future.

TradeStation Accounts

TradeStation has a variety of accounts to meet your needs and current situation. Some accounts give you more features. Investors can also choose from TradeStation’s tax-advantaged retirement accounts.

Individual and Joint Accounts

With an individual account, you can be the sole owner and trader on an investment account or opt for a joint account with another person. The joint accounts have a right of survivorship which means assets get transferred to the surviving owner when one of the joint account members passes away. While both members are alive, they can access the joint account and make contributions as they desire. Both members of the joint account can also sell assets at will and transfer funds to their individual bank accounts. It takes an immense amount of trust to set up a joint account.

Retirement Account

If you’re looking to save money for the future and the day you can retire, a retirement account might offer you tax advantages. However, there are strict rules on withdrawals on this type of account. The IRS imposes penalties if you withdraw money too early. Furthermore, the IRS sets limitations on how much you can contribute to a retirement account each year. Your income and age both play factors in your maximum contribution limit.

TradeStation lets investors choose from traditional, and Roth IRA plans. Investors can also choose from SEP and Simple IRAs and roll over their current retirement accounts. A TradeStation retirement account can give investors exposure to stocks, mutual funds, ETFs, options, futures, and crypto. That’s more asset classes than most retirement accounts. You can open multiple retirement accounts at TradeStation, but having multiple IRAs will not change your maximum contribution.

Entity Account

Some investors also have businesses, and those companies need financial strength. TradeStation allows its users to create Entity Accounts based on their company’s legal structure. You can open an entity account as a limited partnership, general partnership, corporate, trust, limited liability, or sole proprietorship. You get to control the investment account. Depending on the scope of the account, it may only benefit the business owner or financially strengthen their employees and partners as well. TradeStation has a simple process for creating your account, funding it, and getting started with trades.

TradeStation Fees and Cost

Brokerage platforms use fees to increase their revenue. It’s the cost of doing business on these platforms, but some brokerage firms are more reasonable than others. TradeStation has a few fees and costs involved with its platform. Here’s what you can expect.

TradeStation Trading Fees

There isn’t a fee when you’re trading stocks and other investment instruments. You do not need to make a minimum deposit to open an account. However, you need at least $2,000 in your account to trade positions on margin.

Non-trading Fees

The TradeStation Analytics tools cost $99 per month for non-professional traders and $199 per month for professional traders. You don’t need these tools to use TradeStation, but they can enhance your trading experience.

Options Contracts

TradeStation charges $0.60 per options contract. That’s a little cheaper than other brokerage firms. This fee can add up quickly for active options traders, so it’s good to save a few cents on each trade.

Futures Contracts

The cost of futures contracts depends on how you invest in futures. While futures and futures options come to $1.50 per contract, it only costs $0.50 per contract to get into micro futures. Just like with options, you incur the fee for every purchase and sale of futures contracts.

Stock Trading

You will not incur any commissions for trading stocks and ETFs. Many brokers offer commission-free stock and ETF trading. However, you should look at the expense ratio of any ETF or mutual fund you trade. It’s a silent expense that will impact your total returns. This isn’t TradeStation specific, but it is something you should know when calculating costs.

Platforms

TradeStation users get free access to the broker’s web trading, mobile apps, and desktop platform. You also get free access to real-time data for stocks, ETFs, options, futures, futures options, indices, and cryptocurrencies.

How to Open an Account with TradeStation

Opening a TradeStation account is pretty straightforward. You can open an account in a few minutes on the broker’s website. You’ll need to provide some key information when signing up: