Review of: Firstrade

Reviewed by:
Rating:
3
On November 8, 2016
Last modified:November 10, 2016

Summary:

Firstrade is a great broker if you are looking for simplicity. There are quite a few brokers that offer more on their platform, but many beginners and even many advanced traders never use the tools. Firstrade does a great job at focusing on its core offering and being right in the middle on price.

Firstrade Review Overview

Firstrade offers one of the simplest investment platforms when it comes to usability. Their web-based platform was recently redesigned and is extremely user-friendly. We played around with the site for just a few minutes and felt we had a good grasp of how it was organized and how to find anything we might need.

That being said, part of their simplicity comes from the lack of options on their platform. It can do all the basics, and perhaps a little bit more, but when it is compared to TD Ameritrade, Options House, or other discount online brokers, it doesn’t offer nearly as much in terms of analytical tools and reports. This includes technical analysis charts, fundamental analysis, market reports and more. It is our opinion that one would be better off with Trade King, which offers more information, but at a lower cost.

Options House Review

TD Ameritrade Review

Trade King Review

Firstrade Basics

Stock Commission $6.95 per trade
Options Commission $6.95 + $0.75 per contract
Account Minimum No account minimum
Signup Bonus Yes. Trade free for 30 days
Fees No hidden fees that we could find
Top Features Simple mobile platform, low cost per trade
Mobile App Yes. Second only to TD Ameritrade. 3.5/5 stars on Google Play store and 2.5/5 stars on iTunes store
Customer Support Available 24/7 via phone, chat, or email

Pros of Firstrade

Commission-free ETFs

For beginners that do not know, an ETF, or exchange-traded fund is a group of assets that attempts to track an index or market. Buying an ETF instead of a stock is a great way to diversify your portfolio while still investing in industries that you believe have strong potential.

It has become increasingly common for discount online brokers to offer a group of commission-free ETFs that give investors the ability to add ETFs to their portfolio for no cost. Firstrade does require that you hold the ETF for at least 30 days to avoid paying commission, so it is not a good strategy for day traders, but it can be a great way for smaller investors to control their portfolio allocation without spending a large percentage of their investments on fees.

Firstrade offers 12 commission-free ETFs, which is more than a lot of brokers that offer none, but less than most of the dominant players in the industry. For comparison, TD Ameritrade offers over 100 commission-free ETFs in a variety of industries. For a list of the 12 commission-free ETFs offered by Firstrade click here.

Ease of Use

firstrade mobile platformThe Firstrade web-based platform is extremely simple to use. For this Firstrade review we spent a lot of time maneuvering through the navigation and had no issues finding what we needed. One thing we were particularly impressed with was the tax center, which can be confusing in many brokers. All the information we needed was readily available and easy to find.

There is not a lot of fluff and not a lot of content on each page. Finding and understanding account and margin balances is easy to do. They also have a section for fixed-income investors that is simple to use and extremely useful.

Firstrade ReviewThe mobile app is a similar experience. While some reviews online claim that the app will crash with them a lot, we did not experience this once. it is worth noting that all online reviews come from previous versions of the app, and Firstrade claims to have made updates that fixed most of the bugs. We will update this Firstrade review accordingly as updated reviews come out.

It is also worth noting that the app, as of the time of this review, does not have a version that supports iPads and tablets. If you trade primarily on these devices Firstrade is definitly not a good option for you.

Security

If this matters to you, than security is definitly an area where Firstrade shines. It is almost to the point that it is annoying, but at least you know your accounts are secure. They use an ATM like PIN that you have to put in in order to log into your account. Their signup process also has a lot of security built into it. It took a little longer than we would have liked, but once again, to some people security means a lot. This is one area where Firstrade outshines all competitors, including TD Ameritrade.

Mutual Funds

For this Firstrade review we spent a lot of time looking at mutual funds. Firstrade at first glance seems to be a much better deal when it comes to mutual funds. They offer both load and no-load mutual funds (for beginners: load mutual funds have an upfront cost associated with them, while no-load funds have it built in). The load funds are only 9.99 and the no-load funds are free.

They also offer access to nearly 10,000 mutual funds, with about 3,000 of those being no-load funds, which most investors tend to prefer.

Cons of Firstrade

Research

Research has really never been an area where Firstrade shines. You can read Firstrade reviews all the way back to about 2010 and see that people were unhappy with the amount of data that was available to them with Firstrade.

Fortunately, in 2015 Firstrade did a decent overhaul and changed their systems over to Morningstar. Morningstar is easily one of the best investment data companies and Firstrade made a wise decision switching over. The data is available and easy to use on Firstrade’s website.

Unfortunately the same overhaul was not given to technical analysis charting and the site continues to fall behind competitors in this category. One simple way to look at it is just looking at the numbers. Firstrade offers roughly 30 different charting options, which may sound like a lot, but is nearly a third of the industry average. For beginners it will be good enough because they will likely start with more basic charts, but for most intermediate and advanced traders a better platform for charting will likely be needed. Our favorite charting platform is TD Ameritrade, but the price scares you away Trade King has a decent one at a much better price.

After-hours Trading

Firstrade has always bothered us with their unconventional choice of premarket and aftermarket hours. While the premarket is open at 4:15 AM (ET) and the aftermarket closes at 8:00 PM (ET), Firstrade only gives investors about an hour and ten minutes of each. If you like to trade in the premarket and aftermarket this can be frustrating and it is recommended that you try another broker. For those that don’t do much trading in these hours anyway than it is not a huge deal, though still strange.

Forex and International Markets

Firstrade does not currently offer access to international markets or Forex. For beginners, international markets won’t be a huge deal. Even for many intermediate level traders these are not a big deal. It is also worth noting that most discount brokers do not yet have access to international markets, though many are somewhat making them available through ETFs etc.

Forex on the other hand is available on many online platforms, and if you currently or sometime in the future plan to trade in Forex than it may be a good idea to start with a platform that allows you to do just that.

X-stream

X-stream is Firstrade’s research and trading tool. It is web-based, and is pretty simple to use. Unfortunately a lot of X-stream is built on Java, a language that struggles in Chrome and Safari, and occasionally works in Firefox. It is our believe that eventually Firstrade will do away with X-stream and add a non web-based platform or simply eliminate it altogether.

Routing Tech

The last frustrating thing with Firstrade is their lack of smart-order routing tech. This technology basically helps discount online brokers find better deals when connecting buyers and sellers. Because they do not have this technology it is fairly likely that you will pay a slightly higher price for stocks than you would with another broker. While the amount isn’t much, it can be a big deal if you are trading with large amounts of money.

Conclusion

In conclusion, Firstrade is in a somewhat awkward place. They charge slightly more than the deeply-discounted online brokers, and they charge slightly less than the upper-end discount brokers such as TD Ameritrade and E-trade. There is a clear difference between TD Ameritrade and Trade King, and for many investors it is worth spending more to have access to TD Ameritrade’s platform and research tools.

Unfortunately, it is the opinion of this review that Firstrade does not offer any reason that it costs more than some of the cheaper discount brokers. Their platform is nice, but simple, and they do not offer anything that you could not get with Trade King or Options House. If all you care about is simplicity in your broker than Firstrade might be a good choice for you, otherwise you should decide if it is worth it to bump up to a slightly higher-price discount broker, or go down to one of the cheapest.

Firstrade is a great broker if you are looking for simplicity. There are quite a few brokers that offer more on their platform, but many beginners and even many advanced traders never use the tools. Firstrade does a great job at focusing on its core offering and being right in the middle on price.

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