TradeStation Forex Broker Review
Being an old brokerage provider (active online since 2000), TradeStation was in a good position to accumulate experience, customers and expertise. Their launch happened before the eventual surge of online trading, which means they were something similar to a pioneer.
They are rather popular now, and not simply because they are old. They have several unique technical solutions – tools, instruments, and platforms – that may improve your trading routine very substantially. In terms of products, the selection includes lots of assets, including shares, ETFs, options, crypto, bonds, futures and more.
Basically, there’s a lot of variety surrounding this broker. But are they, in fact, pleasant to work with?
Just like their famed variety in regards to tools, software and asset types, they also don’t disappoint in this sense when it comes to account types and pricing deals. There are many offers of this type, which might make this subject very lengthy and grueling.
However, the ‘account types’ do not affect the way you trade, most distinctions apply to the ownership of an account, as well as tax bonuses (all of them legal, naturally). Because many of them are similar and, in fact, united into three categories, it makes our job of understanding TradeStation much either.
The pricing deals are much more interesting, because they do affect the way you trade, and they actually differ from one another in some ways. It adds some dose of variety to the chore of setting your account up, but not really. The pricing plans still don’t have unique bonuses or steep differences, which is beneficial to you – no complaints there.
Rambling aside, let’s finally get to figuring out what the distinctions are.
These account types only specify who owns the thing. There are virtually no other unique features (except for one broad category). There are 3 categories in total: personal, retirement and corporate.
This division is actually pretty standard for many bank-like brokers and other financial establishments. It shows you that the company is either operating or at least trying to operate within the legal area, which is deserving of at least some level of trust.
Remember: you’ll have to pick one account type and one pricing deal – they are not mutually-exclusive.
Personal accounts are meant for either one person or a small group of people to own. The most common one is, of course, Individual account – held by just one trader. There are also: Joint type – for two people, Tenants – for several, and Custodial – meant for a minor but entrusted to an adult.
If the account is held by several people, they obviously each have access to it and can monitor, invest and basically do whatever they wish (except terminate). There are some provisions for financial management, but you’ll have to clarify these by yourself. When one of the owners dies, however, the others share the late person’s stake.
It’s a standard practice for these legally-obedient brokers, but it really shows you that the same rules that apply in real life apply here. There are upsides to that, but also downsides. You are protected, but prepare for the bureaucratic mess.
There are several unique retirement plans awaiting you here. It’s basically a list of different tax-light account plans for the old people. You can only apply for one if you are older than 59 and American.
Depending on the type you take, you’ll get different tax-related bonuses. In the classic plan, many of your ‘contributions’ will be tax-exempt. That more-or-less means you get to save money if you are old and trade with TradeStation with this account. Nobody forces you to have it, however – you’re welcome to trade as Individual.
Because this subject is both complex and pretty dangerous if you don’t know what you’re doing, it’s better to seriously prefer Individual over one of these, unless you have somewhere who understands IRAs and pensions near at hand.
It’s basically the same thing as Personal accounts, but for organizations, companies and proprietors. Nothing changes for you at all, except instead of paying the individual income taxes, you pay taxes meant for a company.
Instead of submitting your personal documents, you’ll have to submit the data about your organization, which is another mildly important detail. All trading activities will also be done on behalf of your company and, obviously, the account will belong in name to the organization.
Now, it usually means ‘the CEO’, but the equities you hold will be counted as part of company capitalization, and so forth.
There’s also an interesting account type meant for Sole Proprietors – pretty much identical to the Individual plan, but you pay slightly different sort of taxes and you don’t count as an Individual.
There are 13 various account types (all aforementioned), 2 main pricing plans and several minor pricing plans for some niche products. All of them, however, have some interesting quirks.
It was mentioned that they aren’t very distinct. They aren’t – in quantitative sense. In terms of meaning these few changes have, they have some impact. It’s more interesting in academic sense than game-changing.
These plans are supposed to be commission-free, and largely are. However, you have to read small text and take notice of the changes, even if they seem like nothing substantial to you. In practice, trading here isn’t always free.
- TS GO
GO is the lesser valuable of the pair. You can use it fully with any sum of money – even just one Dollar. Stocks and ETFs on GO are free (at least, commission-wise). However, while the options and futures of all types are ‘free’, you’ll have to pay a fee for each contract you take, some per side (so, both for opening and closing).
The costs aren’t too big, but if you take on many contracts, you’ll see a sizable sum as a result. As a result, the gross costs per contract range from $0.5 to $3. There are solutions that help reduce the cost of futures, but more on them later.
The other significant change is the charges they apply if you trade on their desktop trading platform with TS GO. Every other platform is free, but TS GO charges you 10 USD for each trade you make on desktop. For futures, it’s additional 1.4 USD per contract, instead.
Another sneaky fee they added – this time for both pricing types and regardless of where you trade – is 0.005 USD for each share if it exceeds the barrier of 10000 shares per trade. So, if you trade 11000 shares – then 10000 of them are free, while those spare 1000 will cost you extra 5 Dollars. Neat, isn’t it?
Also remember that any of these pricing plans are only eligible for folks who live in US.
- TS Select
This one is considered a more valuable pick of the two, mainly because using desktop platform (alongside all the other platforms) is not punishable now. The most noticeable different is that you can’t trade with Select unless you deposit at least 2000 USD, while GO is accessible with any amount of money.
The commissions are still $0 for stocks and ETFs. For options and futures, they are a bit higher than on GO – the most visible change being the shift from 0.8 USD to 1.5 USD per standard future contract (per side). And they also added a 10 Cents mark-up for stock options. That’s largely it.
You don’t get to pay the ridiculous penalties if you trade on desktop now, but if your trade exceeds 10000 shares, you’ll still need to pay extra ½ of a Cent for each share that goes beyond this amount.
And, like with GO, you can only select the Select if you live in America.
- Other pricing plans
If you’re observant, you’ve noticed that there are some questions left unanswered. What about non-US residents, crypto or bonds? Let’s cover these topics one-by-one.
If you don’t live in America, you get the same deal as if you’d been using Select – but with some changes. Instead of the ‘$0’ base commission, you pay $5 per trade. On options and futures, you’ll pay them plus the additional costs that Select users are charged. However, you also can trade with any amount of money, like GO users.
The same $0.005 fee is applied to the international users if they trade more than 10000 in one go. Everything else is as usual.
Crypto gets its own pricing deal. The fee size for each trade depends on your balance and your status as a taker or maker. You can pick each one you are, but the fees generally get smaller if you have more money on your account. The min. possible is 0.05% per trade, while the usual amount is 0.30%.
Bonds and mutual funds cost 14.95 USD per trade, while each bond also costs additional $5.
There is also a way to reduce cost for the futures, if you remember. It’s called a Futures Tiered Plan. Basically, if you trade more futures per month, you’ll be able to pay less additional costs for each contract. It needs to be activated to work, and if you stop trading, you’ll have to pay 149.95 USD until you start being active again.
So, you DO NOT want to leave this plan active if you intend to go on a vacation or something.
There are also other fees, but these will provide you most nuisance, while others can be learnt of as you go.
There are 3 main trading platforms you can access, as well as additional software, such as their crypto-trading app.
This entire array of software simply emanates variety, even if they aren’t immediately comprehensible because of it.
- Desktop 10
It’s their notorious desktop solution.
The reason why you have to pay extra (either way) to trade here is because it features tons of helpful tools that can’t be fully used on their Web or mobile platforms. There are so many solutions – it’s simply overwhelming, which isn’t always best. That’s why it’s better if Desktop 10 remains reserved for pros.
There is RadarScreen (only available here) which gives you a least of best deals based on its own criteria and your preferences. There is Portfolio Maestro – an easy tool to manage and compile portfolios, OptionStation – the same but for options, Matrix – tons of analytical tools in one set, and also tons of tools to help you create a strategy.
Additionally, there are tons of charts and indicators so that you could customize your own approach to trading. Naturally, you won’t need most of it if you’re a beginner, nor did it all inspire you if you are one, probably.
Web has an abridged version of Desktop 10. Most of Matrix is gone, and all the other tools are completely unavailable. There are still useful analytical tools, order placement instruments, watchlists, sufficient market data and user-friendly interface for you to enjoy.
It’s also faster and much more comprehensible in comparison to the Desktop version. Obviously, this one was meant for less experienced traders, although it’s still preferable if you enjoy faster execution and simpler UIs as a trader.
Mobile is pretty much just Web version but with portable, easy-to-access and with less indicators and tools. There is still a lot of analytical potential, and placing orders and quotes is just as effortless. However, if you want a full functionality, you’ll be better off with one of the aforementioned solutions.
Because TradeStation may be complicated, they added a whole section explaining how it works and what you can do to better use it. In addition to that, there are several more educative sections for various levels of expertise.
There are tutorials for beginners, materials for people who just want to know more about trading, publications and news about the market (Market Insights) written by competent people that tell you all about the recent developments in trading, financial and crypto markets.
If you want to be even more effective while trading with their software, these materials go well with your goals.
TradeStation seems like a superb deal. They have tons to offer to all groups of traders, regardless of your goals – it’s magical. That said, this broker is also pretty sneaky about their commissions, and you might not even see the commission until you notice that your winnings are smaller than expected.
Go through each of their commissions, count them for what you see as your average trade order, and then see whether the resulting commissions you added up seem like a good deal to you. And be cautious with them, in general.