TradeStops is an online portfolio tracking platform and trading software that brings you a variety of tools intended to help you monitor and improve the performance of your investments. It is a portfolio analysis tool that helps you decide what and when to buy and sell, as well as how much to invest.
Now let’s focus on what the platform isn’t. It isn’t a trading solution. It also isn’t your traditional stock finder. You can’t buy and sell through it. It helps you spot potentially-worthy investment opportunities.
TradeStops is a product by TradeSmith. It is a browser-based platform and isn’t available for mobile or desktop devices. The platform is suitable for both beginner and professional traders, as well as medium- and long-term investors. The main focus is providing all the needed tools for one to successfully manage a portfolio of stocks and balance it based on risk and market volatility.
The platform helps you track equities, mutual funds, indices, penny stocks, OTCs, some ETFs, and options that are traded on U.S. exchanges. It also supports equities listed on the London, German, Australian, and Canadian stock exchanges.
The solution has a convenient and powerful alerting feature that notifies you when there is a change in some of your positions. In fact, it is the alerts that make it stand out. The platform-specific VQ (Volatility Quotient) alert uses a propriety algorithm to adjust the trailing stop percentage to market volatility. Other alert types include option alerts, price targets, entry signals, gain/loss alerts, and more. Aside from that, TradeStops provides its users with a variety of charting tools.
Over time, the platform has helped over 50,000 investors track more than $20 billion in portfolio value.
The first we should start our TradeStops review is the question “How much does TradeStop cost?” The platform comes in three different price brackets tailored to the needs of the different investors. Here are the options you can choose from:
- Basic plan (core tracking): this is the most affordable and simplest option. The Basic plan can help you master risk and build wealth by taking advantage of portfolio tracking, simple and volatility-based trailing stops. The plan costs $228 per year.
- Plus plan (advanced alerts and tracking): for $588 per year, you will get all of the TradeStops Basic’s features plus access to the platform’s most advanced proprietary algorithms and premium alert services.
- Premium (portfolio analysis): TradeStops’ leading solution will cost you $999 per year. It throws in the mix portfolio powering analytics, including Portfolio VQ, and the one-click Risk Rebalancer.
- Before choosing a plan, you can take advantage of a 30-day trial period. You can subscribe to it on Tradestops.com. If you want to find more about that, make sure to contact the customer support. It is often responsive and can be reached out to via from Monday to Friday (9am – 5pm ET) through phone and email.
It is safe to say that TradeStops’ market is very crowded. There are plenty of solutions offering portfolio tracking tools. In fact, most of them are even more functional and provide additional features like trading, advanced customization, charting, algorithm design, stock tracking, and coding, etc. So, how does TradeStops stand out? Let’s take a look at the features that have helped the platform distinguish itself and make a name in such a competitive industry.
Volatility Quotient (VQ) and Stock State Indicator (SSI)
One of the key features that the platform relies on to distinguish itself is risk calculation for each stock in the portfolio. It does that via the VQ and SSI indicators. Let’s go through both of them. The VQ indicator assigns a percentage value to the volatility of each stock in the portfolio. The percentage is used for two goals. First, to determine how far below the current price you should set a trailing stop loss. The second is to identify the maximum amount you can potentially lose on the stock when using trailing stops.
The SSI is an indicator designed to let you know if a particular stock has experienced high volatility. It also alerts if the instrument has recently triggered an entry or exit signal.
Position Size Calculator
The TradeSmith’s team has made the VQ indicator the central pillar of TradeStops. As the indicator is fundamental for many other features in the program, it is safe to say that the product is built around it. The VQ powers TradeStops’ Position Size Calculator, a tool that estimates the allocation for each asset in the portfolio.
Here is how the Calculator works. First, it asks traders about their risk tolerance for a particular trade. After they specify the amount they are willing to lose, the software offers several options. The scenarios differ by the place where the trailing stop is set. The estimations can help traders tailor their buy and sell orders depending on the expected results.
The Position Size Calculator comes with a handy instructions guide. It explains how the results were derived and the way they are affected by different parameters.
Asset Allocation and PVQ Analyzer
The truth is that each portfolio tracking program has an asset allocation tool. The one of TradeStops is no different. What it does is to visualize the way the user’s stock (or other) investments are divided in terms of industries and sectors.
The PVQ analyzer does pretty much the same thing. The difference is that it divides the portfolio constituents depending on their risk, instead of industry. The PVQ divides portfolios into three categories:
- and high-risk.
The analyzer is also powered by the VQ and helps traders acknowledge the level of risk of their portfolios. It can be applied to several portfolios, which makes it a useful tool for multi-portfolio investors.
This tool helps investors decrease the average volatility quotient on their portfolios. What it does is estimate the effect that a change in the number of shares can have on the overall risk.
Another good thing is that you can use the Risk Rebalancer tool even on data imported from CSV files. That way, you can analyze your portfolio either through the direct integration with the brokerage company or through a manually-imported data set.
Similar to many other trading and portfolio tracking software, TradeStops also has an alert feature. The platform supports the common price alerts that let you know if the price of the instrument changes. It also allows you to set alerts for several different cases, including change in the VQ, change in the SSI, stock-specific events, etc.
The truth is that, aside from the alert features, the platform has limited options for customization.
Who Should Use TradeStops
The solution is suitable for investors who actively manage one or more portfolios at a time. It is designed with the medium-term investors in mind who want to improve their risk management and portfolio allocation strategies. It is worth noting that TradeStops is relatively expensive for the average trader. That is why it is used mostly by investors with bigger portfolios.
The platform is a useful tool for traders who don’t have the time or the necessary skills to create their own strategies. If you aren’t in technical and fundamental analysis, then the solution can help you with the necessary investment suggestions. However, if you are an experienced and seasoned trader, then it might not prove valuable to you.
TradeStops is often combined with Ideas, another product from TradeSmith. Ideas is a stock tracking tool. By using the integrated stock finder, you can analyze and find potentially profitable stocks and create a portfolio. The portfolio can then be monitored and managed through TradeStops. When used in combination, TradeStops and Ideas form a complete portfolio management solution.
TradeStops Review in a Nutshell
It is safe to say that TradeStops is one of the niche investment tools on the market. It doesn’t stand out as something complete and unique that can serve investors on its own. It is focused on a particular part of the investment process and does its job decently. You can consider it as your digital mentor for when you need investment advice. However, it won’t help you do that through the platform, nor will it provide advanced research tools.
With that said, it is understandable why some investors, mostly the more experienced ones, struggle to justify the high price of the product. If you are going to pay that, make sure to consider a TradeStops alternative as there surely are better platforms on the market. As a start, just check the research and portfolio management tools of the biggest brokerages like TD Ameritrade’s Thinkorswim. Most of the leading brokerage companies have their own platforms that even come for free.
TradeStops Pros and Cons
All in all, TradeStops is a decent solution. Like any other platform on the market, it comes with its own pros and cons. Before concluding our review, let’s take a look at both and help you find out whether the platform is suitable for your needs:
- Easy-to-use portfolio rebalancing tool
- 3 different pricing plans
- Recurring costs of up to $999 per Year
- Somehow limited in terms of research tools and features
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