Suretrader Review: The Good, the Bad, and the Ugly
Learning how to day trade was the hardest thing I ever tried to do. It took me years before I found any success. One of the things I now realize, looking back, is that my learning curve took 2x longer than needed because I was using the wrong tools. I wasn’t using a broker designed for Day Trading, I didn’t have the right Scanners to find stocks, and I didn’t use good charting software. As a result, I was trading at a serious disadvantage.
Access to the Best Trading Tools
The challenge with access to the best trading tools is that what is best for one trader may not be best for another. Additionally, we have to measure the costs associated with trading tools because the best tools may not be cost effective for a beginner trader. A few of the tools I consider to be a MUST are Trade-Ideas, TC2000 or eSignal for charting, and a fantastic broker.
Throughout the years I have actively traded with Suretrader. When I first traded there the commissions were 4.95 per trade up to 10k shares, and they allowed direct access routing to ARCA, EDGX and other market makers. This gave them a competitive advantage against many brokers that only allowed smart routing.
Changing Commission Structure
In 2017 Suretrader changed their commission structure from 4.95 for up to 10k shares (plus an ECN fee between .0015-.0045) to .01 per share. To clarify the difference in price, .01 for 10k shares is now $100. That is a huge increase in commission. It’s almost an unthinkable increase. In all my years of trading I’ve never seen such a large change in commission structure at a broker.
As you can see from the pricing table below, Suretrader has the highest commissions out of all the brokers we’ve reviewed when trading more than 2000 shares. I personally trade with average share size between 5k-10k, but for people who trade with less than 2000 shares the increased commission may not be as much of a factor. Interactive Brokers offers a similar per share pricing structure, but it’s 50% less, and they only require a $1.00 min per trade if you trade small size like 100 shares. However, Interactive Brokers requires $25k to day trade.
What do high commissions mean for traders? If your commissions are high, you have to be extremely selective about the stocks you are willing to trade. You can’t over trade, or commissions could easily exceed your profits. However, one of the things we say to all of our students is “trade the best, leave the rest”. So that strategy works will with a broker that has high commissions, even though we’d all prefer to have lower commissions and more money in our pockets.
Disabling Direct Access Routing
An additional change at Suretrader was the decision to remove direct access routing. This means traders can no longer send order directly to the market makers. I traded there during times of Direct Access Routing, and during times of “Smart” routing only. I was profitable in both instances, but I strongly prefer the ability to choose the direct access route to send my order.
Direct access routing becomes more important as you scale your strategy to 5k, 10k, and 15k shares. For smaller share size, it’s not as much of a factor.
I requested that they enable direct access routing on my account, but my request was denied. I have heard anecdotally that they will enable direct access routing for some traders, but I can’t confirm if that is indeed the case.
Conclusions on Suretrader
As a result of the changes at Suretrader in regards to commission pricing and direct access routing, the competitive advantage they once enjoyed is now gone, in our opinion. For that reason, I won’t trade there. However, for traders who are below the $25k PDT level, they remain the only option, which means they will continue to enjoy a steady flow of traders. For traders who use smaller size, direct access routing and per share commission may not be as much of a factor.
Despite the higher commissions, if a trader is confident in their skill, it will not stop them from being profitable, it just makes it more difficult because they have to overcome the higher cost of overhead due to commissions.
Since moving away from Suretrader, we have worked closely with Lightspeed Financial and TradeZero to develop promotional discounts to Warrior Trading Students. Both of these brokers offer reasonable commissions and direct access routing, making them a more favorable option for a true day trader, and for our students. We will reiterate that using the best tools will give you an advantage, which makes it extremely important to carefully select your broker.