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Best Algorithmic Trading Platforms in 2024
Algorithmic trading, also known as algo trading, uses computer programs to execute trades automatically. Its main benefit is that it eliminates recklessness from the trading process by automatically executing trades based on pre-determined criteria. This takes the guesswork out of decisions and allows traders to focus on other aspects of their strategy.
When algorithmic trading first gained popularity, only a handful of platforms were available. However, there are dozens of algo trading software products to choose from these days. So how do you find the best algo trading platform? Well, you can start with our top picks:
Top-Rated Algorithmic Trading Platforms for November 2024
eToro CopyTrader
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
eToro CopyTrader
- The largest network of users
- 0% commission trades
- Trade assets like stocks, cryptocurrencies, indices, commodities, ETFs, and currencies
- No additional charge for copying another trader or traders
Coinrule
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Coinrule
- Over 150 trading rules
- Modern UI
- Integration with 10+ crypto exchanges
Pionex
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Pionex
- 16 trading bots
- Small fees per trade
- Free account
Interactive Brokers
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Interactive Brokers
- Access to 150 international markets
- $0 account minimum
- Dozens of algo strategies
Pluto
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Pluto
- Powered by GPT - 4
- No coding required for automation
- Data aggreggation via AI
Best Algorithmic Trading Platforms for 2024:
eToro CopyTrader - Best overall
Coinrule - Best for crypto trading
Pionex - Best for low trading fees
Interactive Brokers - Best for experienced algo traders
Pluto.fi - Uses AI technology
The Advantages of Algorithmic Trading
Algorithmic trading gained huge popularity because of its advantages compared to traditional trading. In algorithmic trading, computers are programmed to follow a defined set of instructions (an algorithm) to buy or sell a security at a specific time.
One of the reasons algorithmic trading systems are becoming more and more popular is because they take impulsivity out of the equation and execute trades based on pure data. In addition to reduced emotional impact, algo trading has several other advantages:
Increased Efficiency
Algorithmic trading can increase the speed and efficiency of trade execution, as well as reduce the costs associated with traditional methods.
Backtesting
Backtesting is testing a trading strategy on historical data to ensure its viability. Backtesting can be used on various time frames, from a single day to years of data. When backtesting, a trader essentially sees how the strategy would have performed in the past.
Objective Decision Making
Algorithmic trading can help remove subjectivity from decision-making, as trades are executed automatically according to pre-determined rules and conditions.
Overall, algorithmic trading platforms can provide many benefits and advantages over traditional trading methods. When used correctly, it can improve the accuracy of trade execution, while also reducing costs. Backtesting is also essential to put any algorithmic strategy through its paces before deploying it in live market conditions.
How We Evaluate Algorithmic Trading Platforms
There are a lot of factors to consider when choosing a broker for algorithmic trading, and it's important to find an offer best-compatible with your trading style and needs. Here are some things to keep in mind when choosing an algo trading broker:
Algorithm Trading Strategies
All good algorithmic trading brokers should offer a wide variety of trading strategies. The most common algo trading strategies are trend following, mean reversion, arbitrage, and market-making. You should also test strategies with historical data before putting real money on the line to determine if they’re profitable and avoid making costly mistakes.
Market Access
Access to your preferred markets is also important. Make sure the platform you choose offers access to the markets you want to trade. For example, if you plan to start trading forex, some platforms are perfect for this because they provide a rich list of forex pairs. Others are better for trading cryptocurrencies or stocks.
Programming Language
If you want to develop your own algorithm trading strategy, it's important to choose an algorithmic trading program that supports the programming language you're comfortable with. C++, Java, and Python are the most popular languages for algorithmic trading.
Pricing
Make sure you understand the pricing structure before signing up. While some platforms are free, like MetaTrader 4, others charge monthly fees. Note, however, that commission fees also apply, depending on the broker you choose. The brokerage company can also charge additional fees, like an inactivity or monthly maintenance fee.
Customer Support
Finally, it's always a good idea to choose an algorithmic broker with excellent customer support. This is especially important if you're new to algorithmic trading and need help getting started. Good customer support can make a big difference in your trading experience.
FAQ
Is algo trading profitable?
While there's an opportunity for significant returns with algorithmic trading, it's paramount to recognize the inherent risks associated with this trading method. The success hinges on the strategy's robustness and the trader's expertise.
How do I start algorithmic trading?
The landscape of algorithmic trading is ever-evolving, making it challenging to pinpoint a singular starting point. Nevertheless, here's a foundational roadmap to begin:
- Market Acumen: Familiarize yourself with the financial markets and the instruments you're interested in trading.
- Strategy Formulation: Identify and develop a trading strategy based on historical data and market patterns.
- Backtesting: Before live deployment, rigorously test your strategy against past market data to assess its viability.
- Live Implementation: Once confident in the backtesting results, transition the strategy to a real-time trading scenario.
- Risk Awareness: Always remain cognizant of the potential risks and the ever-changing market dynamics.
Is algo trading good for beginners?
Algo trading presents both opportunities and challenges for beginners. While it offers a systematic, emotion-free trading approach, the intricacies can be daunting for newcomers. Some believe that algo trading provides beginners an edge through automation, while others caution about its complexities. The decision ultimately rests with the individual. It's advisable for beginners to leverage educational resources, tutorials, and support that many top-tier algo trading platforms offer.
How hard is algo trading?
The intricacy of algo trading stems from the confluence of finance and technology. While the foundational concept is straightforward, its practical application demands a profound understanding of financial markets coupled with technical prowess. For those committed to mastering both the financial and technical facets, algo trading can indeed be a lucrative venture.