Automated Trading.
Automated trading systems execute positions based on predetermined entry and exit positions. Today, over 75% of stocks traded on US exchanges originate from automated orders. This software-based approach to trading is also known as mechanical investing or algorithmic trading. Our guide to automated trading software explains how it works and tips for getting started. We also list the best brokers that facilitate automated trading in 2022.
Best Automated Trading Brokers.
Skilling.
Skilling are an exciting brand, regulated in Europe and beyond, offering 900+ instruments across 7 asset classes and spreads from 0.2 pips.
Automation.
Yes – through MT4 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Instruments CFD, Forex, Stocks, Indices, Commodities, Cryptocurrencies Regulator CySEC, FSA Platforms MT4, cTrader Min. Deposit 100 EUR/USD/GBP or 1000 NOK/SEK Min. Trade 0.01 Lots or 1 Share Leverage 1:30 (EU), 1:500 (Global)
Vantage.
Reliable and affordable trading since 2009. Join over 900,000 others trading on 1000+ CFD products. Trade Forex CFDs from 0.0 spreads on our RAW account through TradingView, MT4 or MT5. Vantage is ASIC regulated and client funds are segregated. Open an account less than 2 minutes.
Automation.
Yes, via Robot.
Instruments CFDs, forex, indices, shares, commodities, cryptocurrencies Regulator ASIC, FCA, CIMA Platforms MT4, MT5 Min. Deposit $200 Min. Trade 0.01 Lots Leverage 1:500.
Deriv.com.
Deriv.com offers CFDs and multipliers with 1:1000 leverage. Get access to volatility indices exclusively at Deriv.
Automation.
Instruments CFDs, Multipliers, Forex, Stocks, Indices, Commodities Regulator MFSA, LFSA, VFSC, BFSC Platforms MT5 Min. Deposit $5 Min. Trade 0.01 Lots Leverage 1:1000.
XM.
XM.com offers a range of account types and a $5 minimum deposit to appeal to all levels of trader. With 1000+ markets and low variable spreads XM.com provides an excellent trading experience.
Automation.
Instruments Forex CFDs, Commodity CFDs, Equity Indices CFDs, Precious Metals CFDs, Energy CFDs, Stocks Regulator IFSC, DFSA, CySEC, ASIC, FCA, BaFin, CNMV, MNB, CONSOB, ACPR, FIN-FSA, KNF, AFM, FI Platforms MT4, MT5 Min. Deposit 5 $/€/£ Min. Trade 0.01 Micro lots Leverage 1:500.
IC Markets.
Trade Forex on 0.0 pip spreads with the world’s leading True Raw forex broker – IC Markets.
Automation.
Yes, via EQUINIX NY 4.
Instruments CFD, Forex, Crypto, Futures, Commodities Regulator ASIC, CySec, FSA Platforms MT4, MT5, cTrader Min. Deposit $200 Min. Trade 0.01 Lots Leverage ASIC and CySEC -1:30, FSA – 1:500.
Axi.
Axi is a global online FX and CFD trading company, trusted by investors around the world. Highly leveraged trading opportunities plus a $0 minimum deposit make it popular with beginners and seasoned traders.
Automation.
Yes (MT4 & Myfxbook) 81.6% of retail investor accounts lose money when trading CFDs with this provider.
Instruments Forex, CFDs, indices, shares, commodities, cryptocurrencies Regulator FCA, ASIC, DFSA, FMA Platforms MT4 Min. Deposit 0 $/€/£ Min. Trade 0.01 Lots Leverage 1:30 – 1:400.
Forex.com.
Forex.com boast a global reputation. Regulated in the UK, EU, US and Canada they offer a huge range of markets, not just forex, and offer tight spreads on a cutting edge platform.
Automation.
Automated trading supported through platforms (MT4)
Instruments CFD, Forex, Stocks, Crypto, Futures, Options, Commodities Regulator CySEC, IIROC, NFA, CFTC, FCA, CIMA Platforms MT4 Min. Deposit $100 Min. Trade $1 Leverage 1:200.
LegacyFX.
LegacyFX is a multi-asset broker offering an MT5 download & free signals.
Automation.
EAs on MT5.
Instruments Forex, CFDs, indices, shares, commodities, cryptocurrencies, stocks Regulator CySEC, FCA, VFSC, NBRB Platforms MT5 Min. Deposit $500 Min. Trade 0.01 lots Leverage 1:200.
IG Group.
IG offer spread betting, CFD and Forex trading across a range of markets. They are FCA regulated, boast a great trading app and have over 47 year track record of excellence.
Automation.
Instruments Forex, ETFs, CFDs, indices, shares, commodities, cryptocurrencies, options, futures, spread betting Regulator FCA, ASIC, MAS, FSCA, JFSA, FMA, CFTC, NFA, BMA, DFSA, FINMA, BaFin Platforms MT4 Min. Deposit £250 Min. Trade 0.1 lots Leverage 1:30.
FXCC.
FXCC is a trustworthy trading broker regulated by the CySEC. The brokerage offers ECN trade executions, leverage up to 1:500 and $0 commissions.
Automation.
EAs on MT4.
Instruments Forex, Indices, Metals, Energies, Crypto Regulator CySEC Platforms MT4 Min. Deposit $0 Min. Trade 0.01 lots Leverage 1:500.
XTB.
XTB is one of the largest stock exchange-listed FX & CFD brokers in the world, offering access to over 2100 instruments on their xStation platform.
Automation.
Yes 81% of retail accounts lose money.
Instruments CFD, Forex, Stocks, Crypto, Commodities Regulator FCA, CySEC, IFSC, KNF, DFSA Platforms Own Min. Deposit $0 Min. Trade 0.01 Lots Leverage 1:500.
FXChoice.
FXChoice is an offshore retail broker offering MT4 and MT5 platform downloads and online CFD trading.
Automation.
Instruments CFDs, Forex, Indices, Commodities, Cryptocurrencies, Shares Regulator FSC Platforms MT4, MT5 Min. Deposit $100 Min. Trade 0.01 lots Leverage 1:200.
Fusion Markets.
Fusion Markets offers low-cost forex and CFD trading via tight spreads. Copy trading, 1:500 leverage plus multiple account types are also available.
Automation.
Myfxbook AutoTrade & MT4/MT5 through EAs.
Instruments Forex, CFDs, indices, shares, commodities, cryptocurrencies, metals, energies Regulator ASIC, VFSC Platforms MT4, MT5 Min. Deposit $0 Min. Trade 0.01 lots Leverage 1:500.
FBS.
FBS is a top online broker offering MT4 & MT5 trading across a range of popular markets. Multiple account tiers and loyalty bonuses are available.
Automation.
Instruments CFDs, forex, indices, shares, commodities, cryptocurrencies Regulator ASIC, CySEC, IFSC, FSCA Platforms MT4, MT5 Min. Deposit $1 Min. Trade 0.01 lots Leverage 1:30 EU and restricted countries, 1:3000 rest of the world.
Pocket Option.
Pocket Option is a global binary options broker with a sleek proprietary trading platform and competitive range of assets.
Automation.
Instruments Binary Options, Currencies, Commodities, Stocks, Indices Regulator IFMRRC Platforms MT5 Min. Deposit $50 Min. Trade $1 Leverage –
BitMEX.
BitMEX offer the largest market liquidity of any cryptocurrency exchange. The platform also offers low trading costs and minimum deposit requirements.
Automation.
BitMEX Market Maker, BotVS, and via API.
Instruments Crypto Regulator Republic of Seychelles Platforms Own Min. Deposit $0.01 Min. Trade Varies upon the crypto traded and amount of leverage Leverage –
NinjaTrader.
NinjaTrader offer investors futures and forex trading. Use auto-trade algorithmic strategies and configure your own platform while trading with the lowest costs.
Automation.
Instruments Forex, Stocks, Crypto, Futures, Options, Commodities Regulator NFA, CFTC Platforms Own Min. Deposit $50 Min. Trade Varies by asset Leverage –
EagleFX.
EagleFX is an ECN/STP trading broker offering a low starting deposit and high leverage.
Automation.
Instruments Forex, CFDs, indices, shares, commodities, cryptocurrencies Regulator – Platforms MT4 Min. Deposit $10 Min. Trade 0.01 lots Leverage Up to 1:500.
VT Markets.
VT Markets is a multi-asset broker with ultra-fast trade executions, spreads from 0.0 pips, 24/5 support, and user-friendly trading platforms.
Automation.
Instruments CFDs, Forex, Commodities, Stocks, Indices Regulator ASIC, FSCA, SVGFSA Platforms MT4, MT5 Min. Deposit $200 Min. Trade 0.01 lots Leverage 1:500.
Axiory.
Axiory is a regulated forex & CFD broker offering tight spreads & leveraged trading.
Automation.
Instruments Forex, CFD indices, commodities Regulator IFSC Belize Platforms MT4, MT5, cTrader Min. Deposit $10 Min. Trade 0.01 lots Leverage 1:777.
Videforex.
Videforex accepts deposits in a range of cryptos and fiat currencies. Payouts reach 98% per trade.
Automation.
Instruments Binary Options, CFDs, Forex, Commodities, Indices, Cryptos Regulator – Platforms Own Min. Deposit $250 Min. Trade $1 Leverage 1:500.
GO Markets.
GO Markets is an ASIC-regulated FX & CFD broker with leveraged trading opportunities and spreads from 0.0 pips.
Automation.
Instruments CFDs, forex, indices, shares, energies, metals, cryptocurrencies Regulator ASIC, CySEC, FSC of Mauritius Platforms MT4, MT5 Min. Deposit $200 Min. Trade 0.01 lots Leverage 1:500.
SuperForex.
SuperForex is an European-based forex and derivatives broker with currency pairs, commodities, cryptos, stocks and indices. The online broker also offers welcome bonuses and trading contests.
Automation.
EAs via MT4.
Instruments CFD, Forex, Stocks, Crypto, Commodities Regulator IFSC Platforms MT4 Min. Deposit $1 Min. Trade 0.01 lots Leverage 1:3000.
IronFX.
IronFX offers online trading in forex, stocks, futures and commodities.
Automation.
Yes – EAs work with MT4.
Instruments Forex, indices, shares, futures, commodities, and metals Regulator – Platforms MT4 Min. Deposit $100 Min. Trade 0.01 lots Leverage –
FxPro.
Multi-award winning trading broker. Specializing in forex but also offering stocks and tight spreads on CFDs and spread betting across a wide range of markets.
Automation.
Instruments CFDs on Forex, Shares, Indices, Metals, Energies, Futures Regulator CySEC, FCA, FSCA, SCB Platforms MT4, MT5, cTrader Min. Deposit $100 Min. Trade 0.01 Lots Leverage 1:200.
Uphold.
Trading in the Uphold environment offers a one-stop-shop for all your crypto requirements.
Automation.
Instruments Cryptos, Precious Metals, US Stocks, Environmental Assets Regulator FCA, FinCEN Platforms Own Min. Deposit $0 Min. Trade $1 Leverage –
Dukascopy.
Dukascopy is a Swiss-based forex, CFD, and binary options broker with tight spreads and MT4 trading.
Automation.
Yes (EAs & FIX APIs)
Instruments Forex, CFDs, indices, shares, commodities, metals, cryptocurrencies, bonds, binary options Regulator FINMA, FCMC, JFSA Platforms MT4, AlgoTrader Min. Deposit $100 Min. Trade 0.01 lots Leverage 1:200.
FinPros.
FinPros offers 400+ instruments with low fees and instant account activation.
Automation.
Instruments CFDs on Stocks, Indices, Forex, Commodities, & Cryptocurrencies Regulator FSA Platforms MT5 Min. Deposit $100 Min. Trade 0.01 Lots Leverage 1:500.
Binary.com.
Binary.com are the established pioneers of binary options. The choice of the advanced trader, Binary.com offer the greatest flexibility of any binary broker. They also offer Forex and CFD via the MT5 platform.
Automation.
Binary.com offer a self build robot feature to design, test and implement automated trading strategies.
Instruments CFD, Forex, Stocks, Crypto Regulator MGA, SC Platforms MT4, MT5 Min. Deposit $5 Min. Trade $1 Leverage 1:1000.
GoFX.
GoFX is an online broker aimed at traders from Thailand. Multiple account tiers, no deposit bonuses and loyalty promos available.
Automation.
Instruments Forex, Cryptos, CFDs on Stocks, Indices & Commodities Regulator FSA Platforms MT4 Min. Deposit $5 Min. Trade 0.01 Lots Leverage 1:3000.
Automated Trading Explained.
Automated trading is a strategy that utilizes a program to execute trades according to a set of predetermined rules. A trader will set limits, such as guaranteed stop and loss orders, using technical analysis and advanced tools.
Depending on the strategy, entry and exit rules can be rooted in straightforward conditions, such as moving average crossovers. Alternatively, they can be built on more complex indicators and requirements.
Once the rules are programmed, automated trading systems monitor the markets, deciding whether to buy or sell according to the inputted rules. Algorithms essentially follow trends and execute positions accordingly. Some systems even integrate news feeds and adjust their approach according to key headlines and announcements.
Once a trade is entered, orders for protective stop losses, trailing stops and profit targets will all be automatically generated. Importantly, if you are in a fast moving market, instantaneous order entry could be the difference between a tiny loss and a significant cost.
Automated trading services can be applied to a range of asset classes including forex, stocks, cryptocurrency, futures and options. Automated trading platforms are also available to traders worldwide, from the UK to the US and all major global exchanges accept automated strategies, including the NYSE and LSE.
Automated trading on MT4.
Pros & Cons.
For the right trader, automated trading strategies offer speed, flexibility and consistency.
Advantages.
Removes emotion – one of the biggest benefits of automated trading algorithms is the fact they remove rash decision making. Some day traders will buy and sell fuelled by emotion which can often lead to errors. Automated trading systems, on the other hand, will execute positions as soon as the specified rules have been met. No emotion, just logic. Backtesting ability – most automated systems will allow you to test your rules and strategy against historical data to see their likelihood of success. This lets you hone a strategy and iron out any issues before putting real money on the line. It also allows traders to determine the system’s expectancy (the amount you can expect to win or lose). Speed – automated software offers enhanced order speed entry. The best programs are capable of adapting to market conditions and generating orders the moment trade criteria are met. In the day trading game, in particular, just a few seconds can make a significant difference to potential returns. Diversity – automated trading systems allow you to increase your hand by using multiple accounts and any number of strategies at the same time. This enables you to spread risk over different instruments whilst still hedging against losing positions. Time – whilst we would still recommend consistent monitoring, automatic strategies do not need to be as closely monitored as manual trading approaches. Once your limits are set, the robot and platform does the work so you have more time for analysis or to set up additional trades.
Disadvantages.
Of course, automated trading won’t be right for every investor. With that in mind, automated approaches are worth comparing vs manual investing to see which best suits your trading style.
Below we’ve listed some of the key limitations.
Over-optimisation – a focus on curve-fitting leads to automated trading algorithms often falling short when it comes to live trading. For example, a lot of investors fine tune a plan with almost 100% profitable trades that don’t ever experience a drawdown. Apply it to a live market, however, and it can completely fail. This is why we recommend sticking with low value trades until you’ve ironed out any problems. False trends – even the best automated trading software can trigger false trends. As price reacts to unfolding developments a false trend can spiral. This was demonstrated in August 2012 by the Knight Capital group; who lost over $440 million in just half an hour when their trading software went rogue in response to market conditions. Monitoring – investors mistakenly think that once they have formulated automated trading strategies, they can sit back and let the computer do the heavy lifting. Unfortunately, it is not quite that simple. Be wary of computer crashes, connectivity issues, unforeseeable market anomalies, as well as missing or duplicated orders.
Getting Started.
Most traders will opt to work with a third-party platform, though there is also the option to set up your own automated system (more on that later).
Firstly then, you will need to find an automated trading platform. NinjaTrader and Interactive Brokers are particularly popular systems but do your own research to find a platform that offers all the features you need. For example, if you want to trade on the MT4 platform, NinjaTrader is not for you because it uses CQC Continuum. Also not all popular platforms support automated trading, TradingView for example, does not.
Below are some of the most popular ready-made automated systems available in the market today:
One you have signed up with a provider, you can set trading parameters. Custom algorithms will then apply the criteria to execute trades on your behalf.
But it does not, or should not, stop there. Successful automated traders consistently monitor their positions. Complacency leads to losses. Automated systems, like any machine or technology, are still liable to glitches or other technical issues.
Automated trading on MetaTrader 4.
Copy Trading.
At the most basic level, copy trading is a simplified form of automated trading. It allows you to copy the trades of another investor. So after reviewing past performance and specific trade details, you can ‘follow’ a trader, (or better, a group of traders).
As master traders open and close trades, you will see those positions replicated in your own trading account. You can, however, adjust how much to invest, so someone with $100 can still follow the trades of someone making $1m trades.
Importantly, copy trading removes the live decision making process. All levels and order parameters are predetermined. You still need to select the traders to copy, but all other trading decisions are made by the investor you follow.
Copy trading is perhaps the most hands-off approach to automated trading.
Brokers Offering Copy Trading.
Skilling.
Skilling are an exciting brand, regulated in Europe and beyond, offering 900+ instruments across 7 asset classes and spreads from 0.2 pips. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Vantage.
Reliable and affordable trading since 2009. Join over 900,000 others trading on 1000+ CFD products. Trade Forex CFDs from 0.0 spreads on our RAW account through TradingView, MT4 or MT5. Vantage is ASIC regulated and client funds are segregated. Open an account less than 2 minutes.
Axi.
Axi is a global online FX and CFD trading company, trusted by investors around the world. Highly leveraged trading opportunities plus a $0 minimum deposit make it popular with beginners and seasoned traders. 81.6% of retail investor accounts lose money when trading CFDs with this provider.
Developing Your Own Software.
If you are unable to find commercially available software that provides you with the functions you need, then another option is building an automated trading system yourself. Doing so is easier than ever before thanks to code editing tools such as VIM and online marketplaces that make it easy to find freelancers with the relevant skills.
Developing your own software brings with it several pros and cons:
Benefits.
Complete control over how the software works, looks and feels Allows you to build complex, niche trading strategies for particular markets or assets, such as Bitcoin You can optimize the program to work faster than commercial software by including only the features you need.
Risks.
Expensive if you do not know how to do it yourself. Like most construction projects the final cost usually ends up being higher than initial estimates. The software will be untested and is almost certain to contain bugs. Commercial software will likely have gone through thousands of hours of testing and will be used by thousands of traders, exposing potential problems. Your software might perform in unforeseen ways. Even big commercial operations have had issues with trading robots that carry out surprising trades or are triggered by other robots’ actions to commit large sell-offs.
We would recommend making sure that software available on the market does not meet your needs before you start developing your own.
If you do choose to build your own, there are two main ways: writing the code yourself or hiring a freelancer:
Programming Software Yourself.
Designing your own trading software requires a basic understanding of programming as well as knowledge about how to code a trading algorithm. Software packages will help make the process easier, but all of them require a basic programming knowledge.
For knowledgeable coders one of the best editors for building your automated trading bot is Vim .
Vim is a universal text editor specifically designed to make it easy to develop your own software. It was created by Bram Moolenaar in 1991 and is based on Bill Joy’s vi text editor. It is “charityware” meaning that all its proceeds are used to help children in Uganda. Importantly, Vim makes it easy to create and edit software.
Vim is also a command-based editor – you use text commands, not menus, to activate different functions. The command-based interface allows the software to have a lightweight clean interface while still offering an extensive selection of features. The platform is suitable for both novice and experienced developers alike.
Vim’s popularity can in part be attributed to its ease of use. The tools offered make it easy to overview your code and find bugs before they cause any problems. It can also be customized to handle hundreds of programming languages and supports numerous plugins for additional features.
Hiring A Freelancer.
Of course, there is always the option to hire a freelance developer.
If you choose to go down this route, make sure to hire a skilled developer that can develop functioning, stable software. Do not try to get it done as cheaply as possible. Good trading software is worth its weight in gold. A poorly designed bot can end up being expensive in the long run.
It is essential that you provide the developer with a detailed description of exactly what you expect from the trading software. Include all desired functions in the task description.
We recommend the MetaTrader Marketplace for finding potential developers. There is a long list of experienced programmers who sell their services, with developers for every budget.
APIs.
If you chose to develop the software yourself then you are free to create it almost any way you want. Your freedom will, however, be restricted by the API (Application Programming Interface) provided by your trading platform.
The API is what allows your software to communicate with the trading platform to place orders. Your software will only be able to make trades that are supported by the third-party platform’s API. If a particular feature is crucial then you need to choose a platform with an API that offers that function.
Your bot will also have to import market data in some way, and in real-time without delays to effectively respond to markets. With that said, if trading decisions are based more on fundamental factors and rely on just waiting for the ‘right price’, then getting market data without millisecond delays might not be essential.
Final Word on Automated Trading.
It is not hard to see why automated trading has become so popular amongst retail traders. The best software offers flexibility, consistency and speed. In today’s often busy world, it caters to the growing demands on our time and energy. Automated trading solutions are also widely accessible and suitable for both championship traders as well as beginners.
However, if you do opt for an automated strategy, do not become complacent. The importance of frequent monitoring shouldn’t be underestimated. As Jack Schwager highlighted in his ‘Market Wizards’ book series that interviewed successful automated traders, a proactive approach to auto investing was recommended in order to excel.
Further Reading.
Quantopian.com – a web site for researching historic stock price data and writing trading algorithms that can be backtested on that data.
Research.
“Exploring Automated Trading: Modelling a Financial System with a Variable Degree of Automation, Display Design, and Evaluation”, Yeti Li, Nov 2017 “Evaluation of the performance of automated trading systems based on non-parametric methods”, T.N. Batova, T.M. Sizova, A.V. Khomkov, Dec 2017.
Books.
“Professional Automated Trading: Theory and Practice”, Eugene A. Durenard “Automated Option Trading: Create, Optimize, and Test Automated Trading Systems”, Sergey Izraylevich Ph.D., Vadim Tsudikman “Electronic and Algorithmic Trading Technology: The Complete Guide”, Kendall Kim.
FAQ.
Is Automated Trading The Right Strategy For Me?
If you’re looking for an approach that enables you to trade according to predetermined limits, that offers flexibility and utilizes the latest technology, then automated trading strategies might be a good option for you. See our list of the best automated trading brokers to get started.
Can You Automate Day Trading?
Yes, traders can adopt automated systems for day trading. Some traders develop their own systems whilst others use third party platforms. There are lots of options available to traders of all levels but make sure you research a provider thoroughly to ensure they offer all the features you are looking for.
Is Automated Trading Difficult?
Trading is never easy, no matter how long you have been in the game for. Automated trading does offer some benefits, such as removing some of the high-pressure last minute decision making. It also offers traders more flexibility compared to other strategies as it does not require such close monitoring. But as with any strategy, to succeed you will need to dedicate time and effort.
Is Automated Trading Legal?
Automated trading is legal. It is recognized as legitimate by regulatory bodies around the world. With that said, not all online brokers permit automated trading on their platforms. See our list of supported brokerages to find a suitable provider.
Do Automated Traders Make Money?
Some automated investors will make money and some won’t. There are so many factors that contribute to long-term trading success but a method you understand and have confidence in is a good place to start.