Watching E*Trade (NASDAQ:ETFC) these days is a lot like watching the E*Trade baby from the popular ads learn to take its first steps: It's going to be a little wobbly at first, but it'll eventually get where it wants to go.

Last night's third-quarter report was a mixed bag. The company posted a loss of $0.60 a share from continuing operations. It is a wider deficit than the $0.28 a share that the market was expecting, but what else is new? E*Trade has missed Wall Street's profit targets in each of the past six quarters now.

The report gets better after that, though it all depends on where you look.

Some investors may flock to the healthy uptick in trading activity. Daily average revenue trades rose by 7% sequentially to 184,000. It's nice, but it's not the number that I'm looking at in gauging the company's success. Volatility has a way of bringing out the riverboat gambler in all of us, so activity of lack thereof is no big deal.

Worrywart investors will gravitate to the problematic spike in loan loss provisions. $518 million is a chunky number, and it proves that E*Trade hasn't exorcised all of the demons from last year's financial debacle. However, the company continues to reduce its exposure to home loans and undrawn equity lines, even as it sells non-core assets. In other words, E*Trade is working on that problem. It scored some asset sale gains during the period, but also took a hit in unloading its preferred shares of Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE).

So where do I go to take E*Trade's pulse? At this point in the company's turnaround process, I like to see which way the customers are going. E*Trade is looking good on that front, closing out the period with 41,000 more accounts than when it started, and net new customer assets of $800 million.

E*Trade now has 4.4 million retail accounts. That's refreshing when you consider the daunting challenges the company was facing around this time last year, as dumping assets at fire sale prices could have questioned its ability to retain its users. Rival discount brokers like TD*AMERITRADE (NASDAQ:AMTD) and Charles Schwab (NASDAQ:SCHW) never subjected themselves to that heightened exposure to mainstream banking.

So E*Trade is a survivor. Now that the FDIC has boosted its asset protection, most of its clients can rest easy. The bump to $250,000 in account protection finds just $1.4 billion in unprotected liquidity relative to the $4.3 billion at risk three months ago.

Naturally E*Trade still has its challenges, chief among them being a return to profitability to restore shareholder confidence. It won't be easy, but you've seen wobbly babies before. You can't learn how to walk, much less run, unless you fall down a few times.

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Longtime Fool contributor Rick Munarriz has been trading exclusively through discount brokers since 1990, but he does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.