Also see the Update to the Power ETrade Pro Review.

Review Summary:

OK, we've all seen the E-Trade baby commercials and you're probably wondering if that E-Trade baby knows what he's talking about when he hypes their trading platform so much. So we set out to answer the following question - Is Power E-Trade Pro just an average day trading tool with a cute, well-funded marketing campaign or can it seriously be considered one of the best day trading tools on the market today?

Power E-Trade Pro is the advanced trading software offered by E-Trade for day-traders and other active investors. The software is tied directly to the well-established E-Trade brokerage service, which allows individuals to trade and manage their own money using either the E-Trade web site or a number of dedicated sofware trading tools. The Power E-Trade Pro software is a stand-alone Java application and is therefore much quicker and more responsive than a web-based trading application. Being Java-based, it also provides a much safer experience from a computer security standpoint than do web-based programs (all things relative of course). As a bonus it's compatible with Windows and Mac.

Using the Power E-Trade Pro application, you can trade stocks, options, ETF's, ADR's, and mutual funds (I probably left something out, but you get the idea). On the E-Trade web site, you can trade in additional markets as well, including commodity futures contracts (e.g. gold, oil, soybeans) as well as stock markets in other countries (Canada, Hong Kong, etc...). E-Trade also offers a separate stand-alone application for trading futures called TT_Trader, but I won't be covering that in this review.

Overall, I found the Power E-Trade Pro application to be a highly technical, highly powerful, and user-friendly equity and options trading platform. Stock market trading does not feel like a game when you're using Power E-Trade Pro. It feels like serious business. Instead of pretty borders, pretty icons, and other frills, you get a lot of sub-windows and numbers rendered in green, red, black, and white. Sometimes I feel like I'm in the 1960's NASA mission control center when I'm using Power E-Trade Pro, and I like it that way. This is a serious stock market software program intended for serious traders who know how to use a tool like this and who can interpret an avalanche of data in both a strategic and tactical way.

And with the added benefit of a single E-Trade login to manage your savings, brokerage, and investment accounts, there's a tremendous amount to like about this platform.

So, without further ado, here's the Power E-Trade Pro review.

• Pros:
  • Orders are executed quickly and accurately
  • Simple and complex orders can be placed using a variety of methods
  • Stock and options orders can be routed through specific exchanges to take advantage of arbitrage opportunities
  • Single ETrade login can be used to place orders on the web site as well as in ETrade Pro


• Cons:
  • I did run into a bug once that left me with a strange options position


• Comments:
  • Basic and complex stock and options trades are easy to execute in Power E-Trade Pro. In addition to market, limit, and stop orders, you can execute percentage-based or dollar-based trailing stops and stock orders based on multiple conditions (e.g. if this happens, then sell this and buy that). For options trades, you can buy and sell calls and puts, execute buy-writes (covered calls), and implement multi-leg complex spreads such as butterflies and condors. Using the included Power E-Trade Pro Excel tool, you can can even use Microsoft Excel to place conditional stock orders based on your own custom calculations (if you have the confidence and courage, of course!).
    
    Another powerful feature is the ability to route your orders through specific exchanges. For stocks, Power E-Trade Pro provides specific routes to ARCA, NSDQ, NYSE, and Auto (which means you have no preference). This allows opportunity for arbitrage plays since prices can differ among the exchanges and since exchange prices can be tracked individually using the Time and Sales window. For options trades, the available stock exchanges are AMEX, BOX, CBOE, ISE, NOM, NYSE, and PHX.
    
    I did experience one problem with order executiion, though. One day I noticed a long call position in my account for an order that I did not place. A phone call to E-Trade technical support revealed an open long call position, but with no opening order to go with it. They walked me through the process to close the position and reconciled my balance immediately, but my statement still shows a closing options trade without a corresponding opening trade. I'm not sure what my accountant is going to say when he sees that at tax time! In either case, it only happened to me once and it was over 8 months ago so it can definitely be considered an anomaly. Overall, trade execution on Power E-Trade Pro has been excellent.

• Pros:
  • Extensive symbol list support for stocks, options, mutual funds, ETF's
  • A tremendous amount of data for each symbol
  • Includes quality level 2 data for market depth and time/sales
  • Market depth window is available for options as well as stocks


• Cons:
  • Some symbols remain in the system even after they are delisted


• Comments:
  • Power E-Trade Pro supports an extensive symbol list (I have personally looked up over 7,000 symbols), providing real-time quotes, fundamentals data, and measures of performance and volatility.
    
    A brief count revealed over 100 available data fields for each symbol, including information on dividends, bid/ask spreads, market cap, intrinsic value, and volume (current day, previous day, and 10-day average). This allows your watch lists to include everything you need to make a knowledgeable trading decision.
    
    You can also have dozens of watch lists, charts, and other components on the screen at the same time and they will all be updated flawlessly in real-time (assuming that you are running a reasonably up-to-date computer).

• Pros:
  • An unlimited number of charts can be displayed on screen at the same time
  • Chart views and time frames are highly configurable
  • Option price and volume data can be charted
  • A vast number of studies and analytics can be displayed on the same chart
  • Charts (and other windows) can be linked directly to watchlists


• Cons:
  • Occasionally the watchlist/chart synchronization stops working for a few seconds
  • Options risk/reward profile cannot be charted


• Comments:
  • The charts in Power E-Trade Pro are very flexible and can be configured to display price and volume data in a number of ways. Time frames can be customized several ways, making it easy to see long and short-term trends. In addition, a number of standard and customizable studies can be applied, including moving averages, MACD, volatility and momentum indicators, Bollinger Bands, and dozens more.
    
    For options investors, implied volatility and put/call ratio can be plotted as well. However, one limitation of the charting capability is that options payout profiles cannot be charted.

• Pros:
  • Extensive list of high-quality news sources
  • Very powerful news search tool
  • Briefing.com view has a number of very useful features including calendars and summaries


• Cons:
  • Some news stories show up multiple times from the same source
  
  


• Comments:
  • At this point I'm never surprised to discover how in-depth Power E-Trade Pro can be. The news module can be configured in a number of ways to display news from DowJones, MarketWatch, Business Wire, MarketWire, GlobeNewswire, Briefing in Play, and PR Newswire. In addition, there is a dedicated section for news provided by Briefing.com, which allows you to view several different market overviews, from a very broad macro picture of the stock market down to a real-time market analysis view organized for specific sectors.
    
    The Briefing.com view also gives you access to stock upgrades and downgrades, earnings calendars, economic calendars, and calendars for scheduled stock splits. Perhaps the most powerful feature is the highly-configurable search function, which will allow you to seek out news for specific sectors, industries, mergers, splits, and anything else you would like to filter on. Like the other windows, your news window(s) can be synched to one or more watchlists so that when you select a symbol in the watchlist, you will automatically see your custom-filtered news headlines for that symbol.

• Pros:
  • Data can be exported to Excel for additional analysis and charting
  • Trades can be executed based on the results of Excel formulas
  • Great feature done well. All brokerage/trading software should include features like this


• Cons:
  • Window switches back to the main app when a trade executes
  • Occasional lock-ups when attempting to add or delete rows in Excel
• Comments:
  • One of the features of Power E-Trade Pro that really sets it apart is it's data export functionality. Data can be exported into a Microsoft Excel spreadsheet for additional analysis and charting beyond what is capable in the main application.
    
    You can devise your own custom formulas for spotting movement and liquidity, as well as anything else you can think of. For instance, there are a lot of different methods for how to calculate a company's "proper" P/E ratio, and these types of calculations are easy to set up, allowing the quick comparison of many stocks at once. The charting features in Excel are very comprehensive, so you have a lot of cool functionality there as well. Another nice feature is that you can export your positions list and your account balances, which makes it easy to calculate possible rates of return on your uninvested cash.
    
    In addition, your Excel spreadsheets can be set up to execute trades based on the results of your custom formulas. If you want to sell after an 8% loss, you can easily set this up without doing the math every time. Other rules can be implemented just as easily, including complex rules based on multiple conditions. If successful trading is all about information and discipline, this is certainly one way to get there.
    
    I do have one complaint about the Excel module in that the screen focus shifts over to the main trading application whenever a trade executes. This can interrupt your workflow and requires you to click back over to the Excel application manually each time. If you have 5 pending orders and you are working in the Excel module, it can get annoying each time you're interrupted (besides there's already a "bell" sound that goes off alerting you that a trade was executed). I also have had a few cases where the Excel module locked up while I was attempting to delete or insert columns, but I have learned to be more slow and deliberate while doing this, especially when working with real-time quote updates. Despite these few problems, overall the data export features of Power E-Trade pro are very powerful and easy to use and I am really looking forward to seeing what other types of analysis I can come up with to streamline my trading research.

• Pros:
  • All account information and services are easy to find and easy to execute
  • Can trade stocks, options, ETF's, ETN's, ADR's, bonds, mutual funds, and futures
  • Website provides a tremendous amount of stock market data, including micro and macro data
  • Provides a number of very useful tools such as stock screeners and portfolio risk analyzers


• Cons:
  • Options analysis is not a strong point


• Comments:
  • I suppose anything can be made better, but the Power E-Trade Pro website is pretty darn good. As far as gathering market news, quotes, charts, and analysis is concerned, I rarely need to stray far from the E-Trade website's "Quotes and Research" section. That's not to say that I don't, but most of the stuff I find on other sites is available on the E-Trade site as well. Included on the site are a few useful screening and analysis tools, but, like in the Power E-Trade Pro application itself, options analysis is not one of it's stronger points.
    
    Of course, everything else found on the website in terms of quotes, charts, and news, are also available directly within the Power E-Trade Pro application itself and are easier and faster to access there as well. The stand-alone Power E-Trade Pro application provides it's own set of real-time analysis tools that are different from those found on the website, so it's good to use the ones available on the web site as well.

• Pros:
  • Very short wait time for Elite Customer Service to pick up the phone
  • Support staff has good knoweldge of the market and are willing to help


• Cons:
  • I stumped them with a few questions about how their performance data was calculated


• Comments:
  • Since Power E-Trade Pro is such an in-depth, data-rich, and flexible system, you will need to take some time to figure out where everything is, how it works, and how you would like to configure your trading windows (i.e. watchlists, charts, time and sales, options chains, news, etc...). I have contacted E-Trade customer support a number of times for issues such as how to configure the software , how to implement different options strategies, how to keep track of cash and margin, how to interpret chart analytics, and how to find, interpret, and track fundamentals data. The support staff has always been very helpful and knowledgeable and there is never a long wait time. I can't remember ever waiting more than 1 minute for someone to get on the line. Overall a very painless experience.
    
    It also seems to be clear that they employ people who are familiar with the art of trading rather than just staffing a room full of technical support staff who have been "trained" with a 15-page manual. That being said, some members of the support staff have more knowledge and experience than others, so don't be afraid to ask for someone who may know more about your topic.