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Trade Station Review

About Trade Station:

Trade Station is a wholly owned subsidiary of Monex Group, an online financial services firm based in Japan. Trade Station Group Inc, operates through two subsidiaries Trade Station Securities Inc, and Trade Station Forex Inc, The Company was created in the year 1982 as Omega Research Inc. The former offers brokerage services in Stocks and Futures, whereas the latter provides Forex brokerage offering.

Key offerings:

 

TradeStation offers investing option in asset classes such as Stocks, Futures, Options, Forex, Mutual Funds OTCBB and Pink Sheets. The Firm provides direct market access through ECN like other discount players.

Investor education is provided through TradeStation labs, online University. Apart from that In-person trainings are also available. The online University contains eBooks and video tutorials   about the basics of TradeStation platform; it also offers tools to learn about automatic trading which includes various complex strategies with the help of a programming language called Easy Language.

Since, TradeStation started off as charting software, and hence its trader-focused mantra is reflected across its services portfolio, which are:

  • Mobile Trading
  • Automated Trading
  • Large number of assets: equity, options, futures, Forex, T-bills, Mutual Funds, Bonds, etc.
  • Real-time market data
  • Best order execution
  • Programmable platform

Advantages:

 

TradeStation offers numerous benefits, namely:

  • Allows traders to create and use their own charts along with standard charts in trading platform though easy-to-use built in Easy Language programming language.
  • Facilitates traders to seamlessly configure and backtest trading rules that they can use for Automated Trading
  • Charges low commissions compared to other competitors
  • Its state-of-art IT infrastructure minimizes impact cost for a trade by providing best price in minimal time
  • Offers customizable trading platform and availability of web trading platform.
  • Provides 24 hours Tech support
  • Promotes collaboration among traders by providing discussion forums and TradeStation Wiki
  • Allows to integrate add-ins built by other TradeStation users
  • Won numerous awards
  • Excellent trading software making it F&O traders’ preferred trading tool

 

Drawbacks:

 

  • Charges proved to be costly if trading frequency is low
  • The trading platform and the automation is difficult to learn for beginners
  • Minimum account opening amount is $5000 for non-day traders and is $30,000 for day traders
  • Annual net income of at least $50,000 and liquid net worth of at least $75,000 is required to open equity account.

Trading Platform and Tools:

 

The trading platform is available in both standalone and web versions. The platform enables automated trading through its programming language called Easy Language. It provides a tool called Radar Screen through which a trader can pick stocks by recognizing a specific pattern in the price movement. (Technical analysis indicators) Also certain alerts can be created with the help of automation to notify an investor in case of a certain custom defined event.

Various charts and charting tools are available which help in analysis based on different parameters like time, volume of trade etc. Historical intraday data is available through which back testing can be done in order to analysis the performance of custom strategies. Conversely a walk forward optimizer can be used to predict future movement of the prices to find the expected performance.

For option trades a software called Option Analysis is available. It calculates standard Greeks such a Delta, Theta, Gamma, Omega and Vega, for an option. Also, does what-if analysis and graphical analysis.

The platform also provides market research before trading based on fundamental parameters. Some independent research and news is made available, as well, to the investor.

The Execute trade window provides the facility on one click trading which is available in latest trading platforms now-a-days.

Tools like Trade manager can be used to monitor the positions on a real time basis and risk management strategies of portfolios can be developed.

Last but not the least; the Easy Language can be used to build scripts based on custom strategies for algorithmic trading which is the buzz word these days. The programs can be integrated with other open source languages.

 

Opening an Account:

Opening an account with TradeStation is easy; it can be done online by providing the required information through a five step process. Assistance is available on phone for filling the form. The requirements include SSN number, Permanent and mailing address, U.S Drivers license and Employers name and address.

Commission rates:

 

Two types of pricing plans for stock trades are available for its customers, One is a per share plan and the other is a flat fee plan. The variable plan charges are 1 cent per share for upto 500 shares and 0.6 cents per share, this includes ECN fees. The other plan costs range from a minimum of $6.99 per transaction to a high of $9.99 per transaction depending on the volume of trade. Similarly, Margin trade rates vary from 6.25 to 7.75 percent.

The option trade costs $1.00 per contract.  The futures trade costs range from $0.25 per contract to $1.20 per contract, excluding exchange and clearing fees. No extra fee is charged for its software to its brokerage clients. Mutual Fund trade rates are at $14.95 per trade.

Customer Care Service:

 

A continuous round the clock customer support is available. It also includes specialist services and In-person services.

Awards:

 

  • Barron’s Best Customer Support and Education, Best Online Broker, Best Trading Technology award for the year 2011.

Synopsis:

 

TradeStation offers one-of-the best trading platform with customizable trading charts and automated trading and is thus aptly suitable for active investors, particularly F&O traders.  However, beginner investors may find its trading platform cumbersome and difficult to master. Furthermore, an investor who trades intermittently will likely find himself / herself paying for features that he/she uses occasionally and should consider other brokerage houses that offers more relevant and flexible pricing.

The backtesting feature involves huge amount of historical data and is a robust mechanism to test the trade strategy performance. However there might be some inaccuracies at the tick level as it does not take into consideration the high low data in a single day. The ability to integrate with third party software offers good amount of flexibility in trading.

When it comes to the commissions part TradeStation falls behind other discount brokerage service providers especially in case of low volume trade. It seems the firm is targeting more of professional/business clients who do high volume and rule based trading rather than Individuals who go for manual and low volume trading. Also TradeStation is not such a good idea for long term investors.

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