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At Crypto-ML, a key to our trading strategy is to take long trading positions when our Market Index is positive and short sell trading positions when our Market Index is negative. While buying cryptocurrency (going long) is easy, short selling requires a bit of research and setup. This post will cover shorting and going long Bitcoin Futures via the TradeStation platform. You’ll also get our thoughts on the pros and cons of the platform.
We should note we are not affiliated with either TD Ameritrade or TradeStation. Please evaluate brokers to ensure they best meet your unique trading needs.
Here’s a quick summary: TradeStation is very cheap, the account minimums are low, the tools are solid, and the educational resources are top notch. Read on for more detail.
Previously, we covered:
- Four ways to short Bitcoin
- Reasons to Trade Bitcoin Futures (long and short)
- How to Use the Market Index and Short Signals
- Is It Better to Trade XBT or BTC Futures
When it came to a trading platform, our screenshots and discussion focused on the ThinkorSwim platform from TD Ameritrade. However, it has come to our attention that TD Ameritrade has requirements certain members may not be able to meet, including:
- Margin trading
- Tier 2 spread option approval
- $25,000 account minimum
See the current TD Ameritrade Bitcoin requirements here: https://www.tdameritrade.com/investment-products/futures-trading/bitcoin-futures.page
With that said, we have opened TradeStation accounts to experiment with the platform and offer insight into a competitive platform. This post will give you the scoop.
Signing Up For An Account
To establish and fund an account with TradeStation, you can expect a somewhat lengthy process. This is not specific to them–it is due to regulatory requirements they must follow to transact in the Futures space.
All told, it probably took about two weeks from initiating the account to being able to trade. This included paperwork, approvals, and funding.
We should note that we did have a few questions along the way and it seemed the “Chat” support option was almost never available. We were faced with fairly long hold times to receive phone support. Hopefully, this was just a one-off experience.
In order to trade Bitcoin Futures on TradeStation, there aren’t any particular requirements (unlike TD Ameritrade). Just be certain you request Futures and fill out the appropriate paperwork to enable Futures trading.
To address a global market, TradeStation partners with InteractiveBrokers to offer accounts in multiple countries.
Given the lead time needed, we recommend opening an account before you need it. If our Short-ML signal is in a “Close” status, that is a great time to get prepared for the next trade.
Minimum Balance Required to Trade Bitcoin Futures on TD Ameritrade
In terms of account balances, the minimum trade size is one contract. As of this writing, that works out as follows:
- Bitcoin price is $3565
- Margin required is 44%
- Account minimum required to trade equals $1585
Not bad and definitely far less than TD Ameritrade’s $25,000 minimum.
Obviously, this will fluctuate with Bitcoin price. But the requirements are very accessible to most traders.
It’s also worth noting that due to leverage, strictly as a trader, it may be best for you to do both your Long and Short trading with Bitcoin Futures instead of actual Bitcoin on traditional crypto exchanges. See our Top 7 Reason to Trade Bitcoin Futures.
Trading Bitcoin Futures on TradeStation
When it comes to actually trading on TradeStation, there is a bit of a learning curve–even coming from other advanced trading platforms. This is simply due to the robustness and flexibility offered.
Fortunately, there is a “paper trading” (simulated trading) platform you’ll gain access to at https://sim.webtrading.tradestation.com/. This will help you practice trading on the platform. Also, if you’re new to Futures, it will give you a chance to practice opening and closing Futures positions.
You’ll gain access to a web version and a desktop version of the platform.
To enter a trade, you’ll want to:
- Type XBT into the search box on the right above the Trade Matrix.
- A selection box will pop up. Ensure you’re on the Futures tab of this box.
- From the selections, choose the closest month (CFE Bitcoin Futures Feb 2019 in this example). This should have the most volume and therefore be most liquid.
- Click on the Bid side to buy or Ask side to sell. An order window will pop up.
Overall, it is pretty easy once you get used to the particulars of the platform.
TradeStation is a very sophisticated platform offering many tools to analyze and execute trades. It is very similar to ThinkorSwim in this regard.
While this can be overwhelming to new users, it should only take you about 30 minutes to figure out the basics and be able to execute trades efficiently.
From there, you can dive into advanced charts and order types.
While TradeStation is very solid, it’s tough to beat the depth and capabilities of ThinkorSwim. If you can meet the minimum requirements of TD Ameritrade, you should definitely take both platforms for a long test drive before deciding.
One of the places TradeStation really excels is in its educational resources. You’ll gain access to a huge variety of training:
- Online recorded
- Online live
The training covers subjects such as:
- How to use the platform
- Trading strategies
- Morning briefings
- Tax and other general knowledge topics
You’ll find a huge range of courses covering just about anything you’d want to know to become a better trader. Multiple courses are pushed out daily. TradeStation really stands out here.
Head to TradeStation University to see just how much educational material they pump out.
And if youre new to Futures, there is a special spot to get you up to speed quickly and then build depth of knowledge: TradeStation University – Futures.
TradeStation offers very competitive, flat pricing on Futures. As of this writing, it is $1.20 per side per contract in the “300 or fewer trades per month” tier.
There are no software fees, monthly fees, or other fees to consider.
TradeStation Pricing (scroll down to the Tiered Plan section)
That works out to just $2.40 to open and close a 1 Bitcoin position.
Utilizing Coinbase Pro, as an example, you have a 0.3% fee on trades. Assuming a $3565 Bitcoin price, that’s $21 to open and close a 1 Bitcoin position.
That means TradeStation is almost 9 times cheaper! That’s very significant.
Trading Cryptocurrency on TradeStation
As a bonus, TradeStation will be offering regular cryptocurrency trading soon. As of this writing, you can join the waitlist and learn more here at https://tradestation/crypto.
This would allow you to utilize TradeStation’s full set of sophisticated tools and apply them to crypto.
Conclusion: Is TradeStation Good for Bitcoin Trading?
Overall, TradeStation seems to be the best overall platform for most Bitcoin Futures traders.
- The barriers to entry are low compared to the competition.
- The tools are sophisticated.
- The fees are extremely competitive.
- Training and resources are plentiful.
What’s your experience with TradeStation, ThinkorSwim, and others? Let us know below.