TradeStation Platform Review

I am currently using the TradeStation platform to day trade.  The ability to back test-trading strategies is what first attracted me to TradeStation.  Another benefit of TradeStation is the ability to trade equities, futures, options, and forex from one trading platform.  If you are interested in TradeStation, this article is a must read review before you make any final decisions.

Strategy Testing

Easy Language

TradeStation gives you the power to right code in Easy Language in order to back test your trading strategies.  Now, while the name of the code is Easy Language, it is far from easy.  If you have previous coding experience, then Easy Language will remind you a lot of C++, but if you have no previous coding experience, do not waste your time on trying to learn the syntax.  Simply look to their third-party programmers for assistance.  These developers are backed by TradeStation and they do not charge and obscene amount of money.  Better yet, if you have a friend or relative that knows how to write code, they will quickly be able to write basic strategies for you.

TradeStation provides some basic literature on Easy Language, but if you want to really get your feet wet, you will have to purchase their home study course, which will run you a cool $149.  Again, if you are here to trade, trade, and leave the developing to the programmers.

Historical Market Data

TradeStation has over 25 years of historical data.  When you look a little closer, the amount of data is dependent upon which investment vehicle you are using:

  • 4 years of intra-day Forex data
  • 8 years of Eurex Futures and Index Data
  • 16 years of intra-day Equities
  • 25 years on intra-day Futures data

So, the real question is do you need all this data from TradeStation.  Well, of course, if you are serious about testing your trading strategies.  This amount of market data will allow you to back test your strategies in bull, bear and flat markets.  You will quickly see how you would have faired in the bull market of the late 90's, or the slippery slope down in '01 and '02.  Most importantly, you can see how you would have done since the market recently bottomed in the spring of '03.

Automated Trading

I do not endorse mechanical trading, as I feel every trader should be responsible for his or her own trading decisions, but I have to admit, having the option of setting up automatic trading is impressive.  In order to activate this feature, you should be certain that your strategy is working properly and has clear stop rules.  The last thing you want is to take lunch and come back to realize you just bought a 10 thousand dollar hotdog.  TradeStation also has a new feature that allows you to execute orders based on fundamental analysis.  TradeStation is the first platform capable of scanning and executing orders based on fundamental factors.

Back testing Strategies

There is one part of back testing that TradeStation does not tell you about and that is slippage.  When you write your Easy Language code, you can tell the code to exit a trade on the close of the current bar, or ext at market on the open of the next bar.  The problem is you may want to write the code to get out at a specific price.  Now, all of you Easy Language experts out there, please relax, I know that you can write code to get out at any particular price, but the average trader will not know how to write such detailed code.  So, in summary remember that if you write your own code, the canned functions in Easy Language will not allow you to easily code your exits.  Just make sure you verify in your performance report that your results have not been inflated or deflated due to slippage.

TradeStation will display a report of your hypothetical trading results.  The TradeStation performance report lists everything from average time in trade, average gain, total commission, annual rate of return to name a few.  Only problem, you cannot export the data to excel.  So, one is forced to manually type in stats into your friendly worksheet processor.  Depending on how much information you want to analyze, this exercise could prove to be time consuming.

Trade Execution

TradeStation has the quick order button execution of every other active brokerage firm.  But the cool thing with TradeStation is the Order Cancels Order (OCO) and Order Stages Order (OSO) order types.  For Order Cancels Order, you can instruct TradeStation to enter a position if the price breaks up or down.  This works well when you have identified two levels on a stock as potential long or short entries depending on how the price breaks.  The Order Stage Order allows you to stage multiple orders for an existing position.  So, if you are long MSFT and want to exit in 3 increments, you can create an OSO order which will stage the orders and when a certain price is hit, it will exit a part of your position at a specific limit.  I often hear traders say that they do not want to put a stop in, because if there limit is hit, they will have to cancel their open stop order, to then put in a limit order to exit the trade.  Well, with OSO in you can place both a stop and up to 3 limit orders in TradeStation, so there is no longer any excuse as to why you can not protect your capital, the second you get in the trade.

Shorting

TradeStation does not have the books to short some of the more obscure stocks.  So, if you want to short stocks that are not well known, you may encounter some trouble with TradeStation.  This does not happen often, but it happens enough that it is noticeable.

Charting

The charts in TradeStation are in real-time and there are over a hundred indicators, show me, paint bars, etc. which can be displayed on the chart.  The only negative is that you cannot execute trades by clicking directly on the chart.  There are multiple screens in TradeStation that will allow you to close a position; unfortunately, the chart is not one of them.

Ability to Link Accounts

TradeStation has the ability to link all of your accounts.  Therefore, you can trade futures, one minute and then put on a trade in your equities account the next.  This is extremely convenient, since you do not have to open another application or go through the tedious process of logging into another account.

Commission Structure

If you are an active trader and you trade under 1k shares per lot, TradeStation makes sense.  TradeStation has a per share cost up to 500 shares.  The first 500 shares are $.01.  So you can buy 100 shares for a $1 and up to 500 shares for $5.  Over 500 shares, it is $.006 per share.  So, if you trade 3k shares, TradeStation can become costly.  The first 500 shares will cost 5 bucks and then the last 2.5k shares will run you another 15 bucks.  The total cost would be 20 dollars one-way for the trade.  In this example, it of course would be much cheaper to trade with a brokerage firm that has a flat charge for all trades.  In summary, if you are going to trade in big lots, 1k or more, go with a flat fee brokerage firm, but if you're going to trade under 1k lots, TradeStation is the place for you.

Support Center

TradeStation has a support and discussions forums, where traders share ideas, stories and  Easy Language code.  Unlike many forums, where there are only a few users, the TradeStation forum has hundreds of quality posts.  I have been able to pickup tons of ideas as well as free Easy Language code for some of my strategies.  Each post is grouped in categories and the users are quick to respond to your questions.  TradeStation has also recently started a Wiki for both their platform as well as Easy Language.  The Wiki is expanded daily.  TradeStation also has a dependable phone support staff.  I have yet to call and not be able to get someone on the line with in 15 - 30 seconds.  The staff is always attentive and willing to help on any issue.  There is a sales desk, equities desk, futures desk, and forex desk.  Each department specializes in their respective areas, which prevents you, the client, from ever talking to someone who is unknowledgeable on how to address your issue.

Radar Screen

TradeStation is the only trading platform, which has a radar screen that can scan the market based on your own market criteria.  Now this is not your standard, scan that can  display stocks with an RSI under 30.  The scan in Radar Screen can be as simple or as complicated as your Easy Language abilities will permit.  So, if you want to look at stocks at 2-day highs, with 25k shares per minute, that are up a minimum of 2%, you can scan the market for this information in real-time.  The only negative regarding Radar Screen is TradeStation only allows you to scan the market for 1k stocks.  But, who needs to monitor more than 1k stocks?

Tim Ord
Ord Oracle

Tim Ord is a technical analyst and expert in the theories of chart analysis using price, volume, and a host of proprietary indicators as a guide...

Tradingsim.com
Day Trading Simulator

Tradingsim.com provides the ability to simulate day trading 24 hours a day from anywhere in the world. TradingSim provides tick by tick data for...

Send this article to a friend.

Enter multiple addresses on separate lines or separate them with commas.