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Best Algorithmic Trading Platforms for Successful Traders: 2023 Picks
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:
Zen Trading Strategies
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Zen Trading Strategies
Pros
- Monthly and yearly subscriptions
- Unlimited support through Telegram
- Cancel any time you want
Cons
- The website could be more user-friendly
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
Pros
- Free plan with up to $3,000 in monthly volume
- Supports all popular cryptocurrencies
- Great for beginners
Cons
- No mobile app
QuantConnect
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
QuantConnect
Pros
- Trade forex, CFDs, futures, options, equities, and cryptocurrencies
- Hosts more than 100,000 algorithms
- Open-source platform
Cons
- Complicated for traders without coding experience
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
Pros
- Free account
- Third-party algos
- Educational material
Cons
- Complicated pricing scheme
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
Pros
- Easy to use
- 16 free bots
- Licensed by FinCEN's MSB
Cons
- Only cryptos to trade
OANDA
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
OANDA
Pros
- Develop strategies in multiple programming languages
- Free demo account
- MT4 and MT5 trading platforms
Cons
- Complicated pricing scheme
MetaTrader 4
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
MetaTrader 4
Pros
- Free mobile app
- Real-time market updates
- Large user community
Cons
- Trade on Forex and stock exchanges only
Trality
Fortunly's Rating: Our editorial team determines the rating based on a set of evaluation criteria developed for each product and service category.
Trality
Pros
- Drag-and-drop builder
- Various pricing plans
- Cloud-based data storage
Cons
- No mobile app
How We Evaluate Algorithmic Trading Platforms
The best broker for algorithmic trading is not a single company. There are a lot of factors to consider, and it's important to find a broker 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 a 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.
Top Algorithmic Trading Platforms for 2023:
Zen Trading Strategies - Best free trial
Coinrule - Best for crypto trading
QuantConnect - Best for engineers and developers
Interactive Brokers - Best for experienced algo traders
Pionex - Best for low trading fees
OANDA - Best for mobile algo trading
MetaTrader 4 - Best for forex trading
Trality - Best for Python developers
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.
FAQ
Is algo trading profitable?
Yes, algorithm trading can be profitable. An automated trading system uses computer programs to trade securities automatically. These programs are designed to take into account various factors, including market conditions and order flow, to make trades. While this type of trading can be profitable, it also carries with it a higher level of risk.
How do I start algorithmic trading?
Algorithmic trading is constantly evolving, so there is no one-size-fits-all answer to this question. However, some basic steps include understanding the markets, developing a trading strategy, backtesting that strategy, and implementing it in a live trading environment. Additionally, traders need to be aware of the risk associated with algorithmic trading.
Is algo trading good for beginners?
Some people argue that algo trading can help beginners by providing them with an automated way to trade. Others argue that algo trading can be risky for beginners because they may not understand all the complexities. Ultimately, it is up to the individual beginner to decide whether or not algo trading is right for them. The best algo trading platform will offer educational videos, guides, or human support to help with this decision.
How hard is algo trading?
Algo trading is not that hard if you know what you're doing and have the right tools. One of the most important things is to have a good understanding of the market. You need to know what you're looking for and how to find it. Then, you need to find the right trading strategy. You can also take some courses to help you get started.