Tradestation Review – 2020

Tradestation is a unique broker as it’s a 100% online broker. Unlike Fidelity or TD Ameritrade, it doesn’t have physical branches with financial consultants. While it doesn’t have physical branches, traders can still work with licensed financial professionals via phone-based support. It also lets investors trade unique products like cryptocurrency, futures, and IPOs or Initial Public Offerings. IPO stocks refer to companies that have just become public and can have significant upside potential.

Besides this, it offers standard investment choices like stocks, ETFs, bonds, and options. This review will discuss its different features, costs, customer reviews, and other unique factors.

Check out our roundup of Best Online Brokers

 

Available investments

Tradestation offers users the option to trade:

  • Domestic Stocks
  • ETFs
  • Mutual Funds
  • IPOs
  • Bonds
  • Options
  • Cryptocurrency

Like most mainstream brokers, investors can trade domestic stocks and ETFs commission-free. Users can search through over 2,000 ETFs that track different sectors and indices. Novice investors can invest in ETFs that track the S&P 500. Advanced investors can try riskier ETF options like inverse ETFs, that move in the opposite direction of the tracked benchmark. Inverse ETFs can be profitable in falling markets, but they should only be used by advanced traders. They’re also considered a short term strategy since public markets always appreciate over the long term.

This broker can also be appealing to those that want to have cryptocurrency exposure. It doesn’t offer as many choices as a cryptocurrency-focused broker, Coinbase, but users can trade mainstream coins. These include Bitcoin, Ethereum, Lite Coin, and Bitcoin Cash.

Also, it doesn’t offer just brokerage accounts as investors can set up retirement-focused accounts like IRAs and Roth IRAs. Business owners can establish accounts that can be owned by their business entities. Its business entity account options include those for LLCs, sole proprietors, general and limited partnerships.

Customer service

Tradestation has won many awards from the 2020 TASC including “best institutional platform” and “best professional platform.” It won these awards because it has options for different business entities. Some brokers only focus on retail investors and managing business 401(k) plans. 

Yet, Tradestation goes a step above by offering tailored brokerage services for money managers and hedge funds. Hedge funds can use Tradestation to make large block trades and use high amounts of margin, or debt. Margin can act as leverage which lets hedge funds conduct high risk, high reward investing strategies like merger arbitrage.

Overall, it has mixed customer service reviews per its 2.5 rating on Trustpilot. The poor reviews complained about how customer service has too many phone trees. Clients have been sent from one department to another without being able to find the right person. Other negative reviews stated that Tradestation still billed accounts, even if the subscription was canceled.

However, it has positive reviews highlighting its in-depth research tools. Its mobile app has especially robust tools like being able to access 43 optional indicators. Drawing tools also let advanced traders draw Fibonacci charts on their phones. Fibonacci charts let users deeply analyze investment movements like pullbacks, reversals, upticks, corrections, and more.

Ease of use

Tradestation’s ease of use has mixed reviews as well. It has detailed whitepapers, blog posts, and video tutorials on numerous investment subjects. These tools can also help users learn the systems and create customized tools like watchlists. However, these guides mainly focus on charts and technical analysis, instead of fundamental analysis. So, traders that primarily invest in stocks could be better off with a different broker.

It also lets traders set text alerts to keep them updated on strategies that interest them. Investors can also join groups and network among fellow traders. This can help them solve their problems and gain new skills.

While it has vast educational resources on youcantrade.com, many of these courses are paid versions. Some courses that can be accessed for a one time or subscription fee include detailed courses on day, swing, and options trading. 

Key differentiators

Paid coaching and memberships set Tradestation apart from the other brokers. While it could have more free resources, its paid resources cover many in-depth concepts on advanced investing strategies like day trading. Serious traders can even access private coaches for 1-1 lessons that cost $150 per hour.

Its web trader platform lets investors monitor open orders, active positions, tailored watch lists, and analyze various technical charts. The web trader platform also has ladder trading via Matrix, which lets traders set different intraday price levels for various assets like currency pairs and options.

Pros

  • A wide selection of investments. Users can trade typical investments like stocks or ETFs. They also have access to common cryptocurrencies, IPOs, and futures.
  • Different types of accounts. Some brokers that focus on technical trading don’t offer retirement accounts. Tradestation gives its customers more options by having IRAs and institutional account services.
  • It lets users implement advanced trading strategies like ladder trading. They can also use its comprehensive mobile app to track price points, reversals, and upticks for numerous classes.
  • High-interest cash management account. Users can earn 0.55% interest on idle cash if they have a minimum balance of $500,000 for stock accounts or $250,000 for futures accounts.

Cons

  • Mediocre customer service. Compared to giants like Fidelity and TD, Tradestation doesn’t have the best customer service reviews. It doesn’t have in-person, comprehensive financial planners. Many clients have complained about confusion when contacting the right service person.
  • In-depth educational resources for a price. It has great educational tools, but other companies and even finance youtube channels have useful free resources.
  • Syncing issues with trading platforms. Some traders have mentioned that they’ve had trouble syncing watchlists between the web and desktop apps.
  • Mutual fund trades must be phoned in. This seems somewhat old school, especially since mutual funds can be traded with a few buttons clicks at competing firms.

Bottom line

Tradestation is unique since it operates solely online. Despite this, it has great educational resources, various account types, and customizable investment options. For example, users have given it great ratings for its detailed stock/option screening tools. Advanced investors can stream forex and futures data, which is more complex than standard ETF fact sheets. It has affordable pricing strategies with commission-free trading. However, it could improve its customer service, selection of free training resources, and ensure that all tools properly sync across its platforms. 

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