Time is money when it comes to investing. Automated trading systems can help traders save time, allowing them to seize opportunities that lead to lucrative gains. For example, if a trader has an Automated Trading System in place for their forex trading, they can go on vacation and let the system do their trading. If the market conditions are right, the system can execute trades without manual intervention, helping the trader capitalize on potentially profitable trades while away from their computer. This blog will help you understand the ins and outs of Automated Trading Systems so you can successfully create and implement a low latency trading system that optimizes efficiency, minimizes manual intervention, and enhances profitability.
One key to achieving your goals with an Automated Trading System is having reliable VPS hosting for your trading system. A VPS server will give your trading system a dedicated space to operate on, which ensures it runs smoothly and without interruption. QuantVPS’s trading VPS will help you achieve your objectives with an Automated Trading System by providing a stable server to host your trading system so it can operate around the clock and execute trades for you with zero delay.
What is an Automated Trading System?
Automated trading systems enable traders to program specific trade entry and exit rules that a computer can execute automatically.
- Trading management systems
- Trading bots
- Algorithmic trading
- Automated trading
- System trading
Global Trading with Algorithmic Power
Whether you find yourself trading in the UK, Malaysia, South Africa, Australia, or the USA, your trading algo can go with you and execute trades the same way anywhere in the world. Sometimes, you will find like-minded individuals who come together to create their tools and spread the workload in creation, but you can use one of the existing tools.
Automating Your Trading
You must set the rules yourself or find an auto-trading system that can be plugged in and played with one of the approved trading software tools. If it sounds complicated already, don’t worry. Various step-by-step processes can be followed. Again, you can choose an off-the-shelf system or even a dedicated platform that trades on your behalf, like a robot fund manager.
Crafting Trading Strategies
Trading entry and exit rules can be simple, such as a moving average crossover, or they can be complex, requiring a thorough understanding of a programming language specific to a user’s trading platform or the expertise of a qualified programmer.
How Does Automated Trading Work?
Automated trading systems typically require software associated with a direct access broker and any specific rules must be written in the platform’s proprietary language. Because this trading model uses a tool that can operate like a robot, it is sometimes called a trading robot.
The Rise of Trading Robots
A trading robot is a software or an application that can be installed on the platform and configured to open, close, and provide alerts automatically. Given these capabilities, it is natural that traders frequently rely on trading robots to relieve them of the burden of constantly monitoring positions.
You can learn the trading robot programming language for various purposes, such as personalizing robots or developing your auto-trade software based on your logic or trading system.
How to Automate Stock Trading
Traders and investors can easily set their own entry, exit, and money management rules using an automated trading system, which allows computers to execute and monitor trades automatically.
One of the most significant advantages of this method is that it removes some of the emotion from trading and allows for fewer mistakes because trades are automatically placed based on the criteria we have set.
Setting Simple and Complex Trading Rules
Trade entry and exit rules can be set even under simple conditions. This can be accomplished, for example, through moving average crossover or more complex strategies that necessitate a thorough understanding of the programming language specific to the user’s trading platform. The user can also rely on the knowledge of a qualified programmer.
Related Reading
- How to Automate Trading
- Introduction to Algorithmic Trading
- Trading Risk Management
- How to Set Up Algorithmic Trading
How To Build an Automated Trading System
Define Your Trading Strategy
The first step in building an automated trading system is to define your trading strategy. Your trading strategy should include entry and exit criteria and risk management rules. To do this, you must define your:
- Trading goals and objectives
- Preferred markets
- Style
Your goals and objectives should be specific, measurable, achievable, relevant, and time-bound (SMART). Once you have defined your trading strategy, you can begin developing the rules to trigger trades.
Choose Your Platform
The next step is to choose the platform you will build your automated trading system. Many platforms are available, including:
Each platform has its strengths and weaknesses, so choosing one that suits your needs is important.
What to Look for in Automated Trading Software
There are numerous automated trading platforms available on the internet at the moment. Nevertheless, some common characteristics can help us determine which one is best for us and separate the good from the bad.
Accessibility
Accessibility is critical for automated software because it is unavailable in all markets. If you’re more interested in forex trading, for example, MetaTrader 4 is a great tool. You must know your preferred securities to make the best decision.
Low Latency
When using an automated trading platform, there may be a delay between your price quote, transaction, and completion, disrupting your trading experience. The best automated trading system should provide you with the smoothest price quotation, which means it can protect your investments while providing you with the same market access as a floor trader with the least latency possible.
Language of Programming
If you want to use a more unique and complex strategy, you may have to program it yourself. Different trading platforms use different industrial programming languages, and the programming language is one of the most important criteria to consider when selecting your desired trading platform.
Back Testing with Detailed Price Histories
As investors, we all know how important price charts are for performing backtests, so ensure your selected platform has detailed backtesting that can be used across multiple timeframes.
You should also consider the programming language you will use to build your automated trading system. Some platforms use proprietary programming languages, while others use more common languages like:
- MQL
- C++
- Python
Write Your Code
You can write your code once you have chosen your platform and programming language. This is the most crucial step in building your automated trading system, as it will define the rules that your system will follow. Your code should include your entry and exit criteria, as well as any rules for risk management.
You should also include any indicators or other tools you will use to make decisions. When writing your code, it’s essential to test it thoroughly to ensure it works as expected. You should test your code using historical data to see how it would have performed in the past.
Backtest Your System
Once you have written your code, you should backtest your system using historical data. Backtesting involves running your system on historical data to see how it would have performed in the past. You should test your system using various market conditions to ensure it is robust and can handle different environments.
A Reality Check
You should also test your system using different timeframes to see how it performs over various periods. When backtesting your system, it’s essential to be realistic about your expectations. Your system may not perform as well in the future as it did in the past, so it’s important to be prepared for this.
Optimize Your System
Once you have backtested your system, you can begin to optimize it. Optimization involves adjusting the parameters of your system to improve its performance. Use your backtesting results to identify any areas of your system that need improvement. You should then adjust and retest your system to see if the changes have improved its performance.
A Balancing Act
It’s essential to be careful when optimizing your system, as over-optimization can lead to curve-fitting. Curve-fitting occurs when your system is optimized to perform well on historical data but does not perform well in the future.
Implement Your System
Once you are satisfied with your system’s performance, you can implement it in the live market. It’s essential to start with small positions and gradually increase your position size as you gain confidence in your system. Monitoring your system regularly is essential to ensure it performs as expected. You should also adjust your system to keep it performing well in changing market conditions.
Monitor and Evaluate
After you have implemented your system, it’s essential to monitor and evaluate its performance regularly. This involves tracking your trades and reviewing the results to identify areas for improvement. You should keep a detailed log of your trades, including:
- Entry and exit points
- Position size
- Profit or loss
Monitoring and Refining Your Trading Strategy
This will allow you to track your progress and identify any patterns or trends in your trading. You should also review your trading performance regularly to identify any areas for improvement. This may involve adjusting your trading strategy or changing your automated trading system.
Related Reading
- Best Automated Trading Platform
- High-Frequency Trading Algorithm
- Automated Trading Strategies
- Algorithmic Trading Strategies
- Futures Trading Algorithms
18 Best Automated Trading System Providers
1. QuantVPS: Fast and Cost-Effective VPS Hosting for Algo Traders
Algo traders need a reliable and speedy environment to run their automated trading strategies. QuantVPS delivers with:
- High-performance, cost-effective VPS solutions tailored for algo traders
- Ultra-low latency of 1 millisecond for lightning-fast execution across futures, crypto, equities, and forex trading.
Key features include:
- Support for major trading platforms, such as NinjaTrader, TradeStation, MetaTrader, Interactive Brokers, Sierra Chart, and Quant Tower.
- 24/7 customer support to address any issues promptly.
- A 100% uptime guarantee, ensuring continuous and efficient strategy execution.
QuantVPS provides a reliable and speed-optimized environment for traders to run their automated strategies continuously and efficiently.
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2. 3Commas: Top Crypto Trading Automation for All Skill Levels
When you register with 3Commas, you access a crypto trading platform that works for everyone, from a novice who doesn’t understand the market to an expert who needs a more straightforward place to manage their portfolio.
The range of tools is massive, and you can learn while trading. Experienced traders can register and connect with as many exchanges as they like, try as many bots as they like, and set up a portfolio that serves their chosen strategy.
User-friendly Interface and Mobile Accessibility
The dashboard is easy to navigate, and you can contact the customer service team if you have questions about their:
- Tools
- Resources
- Bots
It might take a little longer to register, but you can also invest in using the mobile app if you’re traveling or just too busy to sit down and “trade” like everyone else.
3. Nurp: Algorithmic Trading Accelerator for All Levels
With its Algorithmic Trading Accelerator, Nurp is transforming algorithmic trading for both beginners and experienced traders. This comprehensive suite of trading algorithms enables you to utilize advanced precision trading technology across various financial markets.
A Comprehensive Trading Solution for Diverse Strategies
Nurp’s cutting-edge trading software is built to act on insights from its in-house research and quantitative teams, along with your chosen risk tolerance settings, aiming for long-term success. Nurp offers a variety of trading algorithms and extensive educational resources to accommodate different trading styles and goals, whether for short-term day trading or long-term investment strategies.
By empowering traders to make informed, strategic decisions in the dynamic commodities, forex and crypto markets, Nurp ensures confident and seamless navigation of forex trading.
4. Interactive Brokers API: Tools for Building Your Own Automated Trading Systems
Through its Traders University, new traders will find plenty of educational materials about different products, markets, and strategies. Experienced traders can play around with automated systems using Interactive Brokers’ API solutions. Interactive Brokers API allows users to build their own automated trading systems using popular programming languages like:
- Java
- Python
- C++
High-Speed Trading with FIX CTCI
You can connect your program right into Trader Workstation. The FIX CTCI solutions enable super-fast trading by leveraging Interactive Brokers’ high-speed order routing for even more sophistication. Trades are executed at the best possible prices, but you’ll pay extra for this service. Required commission minimums for FIX CTCI are $1,500 per month.
5. StreetBeat: A Mobile App for Self- and Auto-Trading
Streetbeat is a fintech firm that aims to simplify investing by combining fintech innovations with software. The firm has a mobile app in Palo Alto that offers self-trading services and auto trading. The app allows users to invest in a range of assets, including stocks and ETFs, but it can also invest in crypto, allowing the platform to do much of the work for them.
The firm’s client-focused approach makes it more palatable for most investors. It also offers:
- Functionality for investors of all skill levels
- Auto trading innovations
- No trading commissions.
- You can start with as little as $1
- Generous bonuses
- Low management fees
Remember, though, that as helpful as this platform is, your management fees could rise depending on the size of your portfolio. Either way, you get the support you need and can enhance your portfolio without doing all the math alone.
6. TradersPost: Automated Trading for Stock, Options, and Futures
TradersPost is an innovative automated trading platform that helps traders automate their stock, options, and futures trading strategies from popular charting software like:
- TradingView
- TrendSpider
TradersPost allows traders to connect their strategies to their:
- Brokers using webhooks for sending signals
- Notifications for keeping track of strategies
- Ability to trade IRA accounts with automated strategies
The platform is also mobile-friendly and has a unified trading UI, which makes managing trading activities across multiple accounts easy.
7. Zen Trading Strategies: Premium TradingView Strategies for Algo Trading
Zen Trading Strategies offers access to premium Tradingview strategies and indicators. You can try any strategy FREE for 1 week when you sign up on its website. All of Zen’s Tradingview strategies allow you to backtest different ideas on Tradingview, so you can look at how your trading idea did over historical data in the past.
Crafting Personalized Trading Strategies on TradingView
Try different trading ideas and customize settings for trend detection, mean reversion, volume, breakouts, momentum, etc. You can also set stop losses, take profit, and add additional filters for how and when your trades should enter and exit. You can see the results visually on your Tradingview chart.
You can also see where trades enter and exit, how they do it, how much profit they make, how much money they lose, and other performance statistics.
8. TradeZero: Low-Cost Trading with Some Automated Features
Mobile and desktop trading are more accessible when you use TradeZero. You can download the app for free or login using the website. In addition to trading for low or no fees, you can chart and complete technical analysis for any asset.
Automating Your Trades with TradeZero Pro
For more powerful trading tools, you can purchase a Pro account for $59 monthly. You can set automated trades using limits and other parameters that help you hedge against losses. While automated trading is not the primary service at TradeZero, you can automate a few trades as needed.
In addition to powerful trading options, you can contact the customer support team 24/7 for assistance with your account.
9. TradeStation: A Professional Platform for Algo Trading
TradeStation offers traders a professional platform for trading equities, ETFs, options, futures, and even cryptocurrency. The robust platform is suitable for both beginners and advanced traders.
A Comprehensive Trading Platform for All Levels
New traders will appreciate the YouCanTrade educational resource, while advanced traders will enjoy the powerful scanning tools and ease with which complex trade orders can be placed. One of TradeStation’s best features is its use of EasyLanguage for its algo trading. Don’t let the fact that this is a computer language intimidate you.
This proprietary programming language developed by TradeStation is widely seen as user-friendly and approachable. Even non-native developers can create powerful and intricate algorithms.
10. Stock Market Guides: Algorithmic Trading Alerts for Stocks and Options
Stock Market Guides has already done all the work for you. With their algorithmic trading software, you don’t have to create or code your algos. They’ve already done years of research and backtesting to find the most powerful algorithms possible for their service. They don’t do the trading for you, but they send you real-time alerts by email or text when they find a trade setup with a strong, backtested edge, which is the next best thing.
A Data-Driven Approach
Every trade alert they send is based on automated trading rules, which means they’re algorithmic; therefore, they have clearly defined instructions for the entry and exit of the trade. Their trade alerts also show you the backtested track record of that specific trade setup, like this: They use their algos to generate stock and options picks.
Impressive Backtested Results
The average annualized return of their stock picks in backtests is 79.4%. For their option picks, it’s 150.4%. Stock Market Guides is a service you should consider if you’re looking for premium returns from an algo software. Their stock and option algo services are $69 per month each.
11. TrendSpider: A Comprehensive Algorithmic Trading Platform
TrendSpider shines as a U.S.-focused algorithmic trading platform. It even includes access to Federal Reserve Economic Data (FRED) to help provide macroeconomic insight alongside your financial market data. This algo trading software extensively covers U.S. markets, including equities and CME futures.
A Powerful Platform for Technical Analysis
TrendSpider is one of the best algorithmic trading platforms for the busiest traders. It permits up to 16 charts per screen. Whether automated or manual, drawing tools can be applied to charts, helping visualize strategies. This popular algo trading software also boasts hundreds of ready-to-use technical indicators.
12. Coinrule: Automate Your Crypto Trading with Pre-Defined Strategies
Coinrule focuses on cryptocurrency. Just like with stocks, some traders produced programmatic trading rules for crypto. With Coinrule, this process is made easy, allowing users to create bots that follow prescribed trading rules.
A Beginner-Friendly Platform for Crypto Trading
What makes Coinrule especially remarkable is the pre-defined templated strategies. This feature is handy for newer traders. Coinrule might be the best algorithmic trading software for beginners in crypto-focused programmatic trading. Coinrule also has unique features, like notifications via Telegram or text messages.
13. PowerX Optimizer: A Unique Option Trading Algorithm
Are you interested in algorithmic options trading? PowerX Optimizer might be the right choice for you. The PowerX Optimizer algo trading software is the child of Rockwell Trading, a consistently highly rated platform. It possesses numerous tools you can’t find on other platforms and provides unique views that can give traders an edge.
In particular, the Wheel is a feature that helps traders manage and collect option premiums. It does much of the heavy lifting from a research perspective, such as:
- Expiration dates
- Strike prices
- Others
This identifies the highest-potential options trades.
14. Mindful Trader: A Transparent Approach to Algo Trading
Mindful Trader is a service by Eric Ferguson, where he shares the stock and option trades he makes in real time. Eric’s trading strategies are all based on algos that he developed. He’s well qualified to create algos, considering he’s a Stanford grad who got a perfect score on the math SAT and was the valedictorian of his high school.
Transparent Trading Strategies
All the trades he takes are based on strict trading rules, meaning subscribers to his service should never be surprised when he enters or exits a trade. You can follow along with his trades or learn his strategies yourself. One of the reasons we like his service is he teaches all the rules for the algos he uses.
Personalized Support and Affordable Pricing
You can sign up for just one month, learn the strategies, and then employ these algorithmic trading rules independently. Another great thing about this service is you can communicate directly with Eric. He handles all customer service, which means if you send him an email, you will get a reply directly from him.
Only a few algo services offer that sort of value. Mindful Trader’s service costs $47 per month.
15. Trade Ideas: A Top Choice for Algorithmic Trading
Trade Ideas is one of the most comprehensive platforms for algorithmic trading. This algorithmic trading platform provides access to a massive suite of trading tools, from technical charting, backtesting, one-click trading, and algo trading. Fortunately, no coding is required to leverage this algo trading software.
16. Botsfolio: A Simple Way to Get Started with Automated Trading
Some traders want to get up and running with algos quickly and aren’t prepared to learn a complex coding language like Python. For these traders, Botsfolio is an excellent option. With Botsfoli, traders select their trading strategy, apply a risk level, and let the software do the rest. It’s that easy. There is probably no lower barrier to entry for traders looking to begin using algos than Botsfolio.
17. TradingView: The Most Comprehensive Automated Trading Platform
TradingView is the most developed and highly automated platform for:
- International stock
- FX
- Crypto traders
It automatically detects chart patterns and candlestick patterns and enables auto-trading. TradingView can automatically detect and scan entire markets for chart patterns, like the double top or rectangle, and bullish and bearish candle patterns, like:
- Harami
- Doji
- Marubozu
TradingView has incredibly powerful backtesting, automatically identifying complex trading setups and issuing actionable alerts. To use the Pine script-powered backtesting, you must learn basic scripting, which can take some time. There is no code-free backtesting or indicator development engine.
I am not a coder, but I’ve used TradingView to develop my Market Outperforming Stock & ETF System (MOSES), identifying potential stock market declines and good opportunities to buy back in.
A Global Trading Community and Broker Integration
TradingView has the largest selection of Brokers integrated into its platform, so wherever you live, you can find an approved and trustworthy broker to execute trades automatically. TradingView has the largest global community of traders and is the number one investing website in the world.
TradingView is available globally for:
- Stocks
- ETF
- Forex
- Crypto exchanges
TradingView is a top choice for all traders.
18. SignalStack: An Automated Trading Execution Solution
If your current trading software does not support automated trading, SignalStack might be the solution you are looking for. SignalStack is an intelligent automated platform that connects your trading software to your broker and offers many features that transform the automated trading experience.
Efficiency and Customization
Firstly, it provides efficient order execution, eliminating the need for manual oversight and ensuring rapid market order placements. Secondly, the platform offers customization and flexibility, enabling traders to personalize their strategies according to their unique investment goals and risk tolerance.
SignalStack helps traders stay informed with real-time monitoring and robust error-handling capabilities, ensuring maximum trade control. It supports a broad spectrum of reputable brokers, like:
- Schwab
- eTrade
- Interactive Brokers
- TradeStation
This allows for seamless connectivity and trade automation. As a result, traders can quickly scale up their operations with the confidence that their trades are being handled correctly and efficiently.
A Powerful Tool for Automated Trading
SignalStack is an excellent choice for any trader to streamline their portfolio management process by automating trade execution. It is also highly adjustable, allowing users to customize its functionality to meet their needs and preferences. With its wide range of features, reliable performance, and extensive broker compatibility, it’s no wonder SignalStack has become one of the most popular auto-trade execution tools today.
Deploy a Trading VPS Today
QuantVPS delivers high-performance, cost-effective trading VPS solutions tailored for automated trading system users. Their platform offers ultra-low latency of 1 millisecond, ensuring lightning-fast execution for:
- Futures
- Crypto
- Equities
- Forex trading
Reliable and Efficient Hosting with QuantVPS
With 24/7 support and a 100% uptime guarantee, QuantVPS provides a reliable, speed-optimized environment for users to run their automated strategies continuously and efficiently.
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