Automated trading strategies help Australian traders save time when forex and CFD trading and can be achieved via algorithms (trading robots) or social-copy tools. Read on to learn about different algorithmic trading tools like backtesting plus various trading software’s social-copy trading features.
Australian traders’ have a range of options when it comes to automated trading platforms and software. If you are new to forex, social-copy trading tools provide an easy entry, while experienced traders can develop algorithmic strategies using trading robots. Below we review the top automated trading platforms available to Australian traders, the style of trading it suits and the best brokers offering the software.
To fully automate forex and CFD trading, trading robots (aka algorithmic trading strategies) can be developed on platforms like MetaTrader 4 (MT4), MetaTrader 5 (MT5) and cTrader. In the MetaTrader community trading robots are referred to as Expert Advisors (EAs), while on cTrader they are cBots.
Algorithmic trading strategies allow you to create programs that automatically monitor financial markets as well as enter and exit trades according to your pre-set parameters. Many experienced traders write their own trading robots, while beginner traders may choose to download and/or purchase pre-designed Expert Advisors.
Social-copy trading is a type of automation where you can follow and copy trading strategies that have been developed by more experienced traders within the forex community. Rather than conducting your own research and executing individual trades, you are instead copying the trades of others. There are different types of account mirroring software, ranging from pure social trading platforms and communities like eToro to copy trading tools like MetaTrader Signals.
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MetaTrader 4 is one of the most popular trading platforms worldwide, largely due to its algorithmic trading robots known as Expert Advisors. The software was released by MetaQuotes in 2005, and ever since has been the gold standard for forex trading platforms.
As well as its advanced trading robot functionality, MetaTrader 4 is one of the best trading platforms available thanks to:
The platforms trading robots, aka Expert Advisors (EAs), enable you to eliminate the need to constantly monitor markets and your open positions. By setting predetermined trading rules and parameters, EAs do the legwork for you and will alert you when market conditions are met.
There are two ways you can implement algorithmic trading strategies on MT4. You can either develop your own or download and use other traders’ EAs. The trading robots are written using the platform’s proprietary programming language, MetaQuotes Language 4 (MQL4), or can be downloaded from the MetaTrader Marketplace online.
Due to MT4 being one of the most popular platforms worldwide, the MetaTrader Marketplace is one of the largest online marketplaces for trading robots and technical indicators. If you are a beginner trader and find the idea of writing your own EAs daunting, you can download 2,100+ technical indicators and 1,700+ trading robots, some of which carry a fee.
Once your algorithmic trading strategy has been developed, you can use the platform’s backtesting features to test and optimise your EA against historical market data. MT4 only allows a single currency to be backtested at a time and can only process EAs that are 32-bit.
The different forex and CFD products you can trade on MetaTrader 4 depend on the online broker you have signed up to. MT4 was designed for trading decentralised markets such as foreign exchange (forex). Although predominately a forex trading platform, most brokers offer a range of CFD products such as commodities and indices.
A downside to MT4’s market access is that you cannot trade financial instruments like shares (not share CFDs) as they run through centralised exchanges. MetaQuotes developed MetaTrader 5 (MT5) to cater to those wanting to access stock markets via exchanges like the ASX.
Thanks to an institutional grade trading environment, low spreads and diverse range of CFDs, IC Markets is a great online broker if you want to use the MetaTrader 4 trading platform.
The broker operates globally and is regulated in three major financial hubs being Australia (ASIC), Europe (CySEC) and the Seychelles (FSA). Regardless of the IC Markets subsidiary you sign up with, you enjoy the following benefits:
MetaQuotes released MetaTrader 5 (MT5) in 2010 and the latest platform provides many improvements in terms of algorithmic trading systems, market access and analysis tools. Although MT5 comes with many benefits and additional features, it is not necessarily an upgraded version on MT4. While MT4 was designed for trading decentralised products like forex, MT5 was developed as a multi-asset platform that gave access to stock exchanges.
Similar to its predecessor, MT5 offers full automation with Expert Advisors (EAs) with some significant improvements. When developing EAs on MT5 you use the MQL5 programming language that many consider more efficient than MQL4 as its based on the C++ programming language and is object-oriented. Unfortunately, the two languages are not compatible, meaning you can’t use EAs written in MQL4 on MT5.
Backtesting is also more robust on MT5. While MT4 is restricted to 32-bit memory and single-currency backtesting, MT5 offers multi-threaded, multi-currency capabilities and can handle EAs that are 32-bit and 64-bit. This allows for faster and more efficient algorithmic trading on MT5 when compared to MT4.
While MT5 is still to take over MT4’s popularity, there are some key benefits to choosing MT5 over MT4:
If you want to get the most out of MT5 and its automated trading tools, Pepperstone is the best broker overall.
Pepperstone operates globally and is regulated in seven major financial hubs in including Australia (ASIC), the FCA (UK), Europe (CySEC) and Dubai (DFSA). Pepperstone offers the following benefits and more to MT5 users:
cTrader was released in 2011 by Spotware catering to retail traders wanting an ECN trading environment. The software provides optimal forex trading conditions with advanced charting, trade execution and algorithmic features.
cTrader Automate is the platform’s algorithmic trading service where you can fully automate trading by building and executing trading robots (cBots) instead of trading manually.
Similar to MetaTrader’s Expert Advisors (EAs), cBots are the platform’s trading robots that allow for full automation. cTrader’s Automate eliminates the need for human control and monitoring by enabling you to develop (or download), backtest and execute custom cBots within the platform.
The C# programming language is used to write cBots in either the visual studio or inbuilt code editor. When developing cBots or indicators, Automate API provides market data and trading functions to help you save time and effort when creating automated trading strategies.
cTrader’s backtesting features are sophisticated, meaning you can easily optimise cBots by testing them against historical data. Visual backtesting is available, as well as the ability to review trade statistics and store your backtesting data.
Pepperstone offers cTrader as a desktop trading platform or trading app for iOS and Android devices. The online broker is popular among algorithmic traders thanks to institutional grade trading conditions, a wide range of CFDs and top-tier regulation.
ProRealTime is a technical analysis and trading platform that provides advanced charting and automated trading tools. The software comes with extensive inbuilt technical analysis tools including:
ProOrder is ProRealTime’s automatic trading tool where you can develop complex trading systems with no coding background needed. A wizard is available where you can define stops, objectives and conditions, with a code generator doing the rest. If you want to write your own code, the ProBuilder programming language is available.
Automated trading systems can also be downloaded from the ProRealTime Marketplace, although the trading community is significantly smaller than MT4, MT5 or cTrader.
ProOrder also offers the following features designed to enhance automated trading strategies:
eToro is an online broker that offers a proprietary trading platform that grants you access to a large social-copy trading community. The software comes with social trading tools such as CopyTrader and CopyPortfolios, allowing you to automate trading via account mirroring services.
On top of extensive social-copy trading features, the broker offers:
CopyTrader, eToro’s social-copy trading, allows you to follow and automatically copy the strategies trades of other users, known as Popular Investors. Whether you are a beginner or lack the time to trade yourself, the social-copy software provides automation that saves you effort conducting research and executing individual trades.
Navigating the eToro platform is user-friendly and easy. You can search by risk score, assets, performance and more to find Popular Investors to follow. Once you’ve found a suitable strategy, you can set an amount for the copy trade, with the ability to pause or add/remove funds at any time. To copy a trader, a minimum amount of $200 is required.
You can follow Popular Investors that are trading a range of financial products like currency pairs, commodities, indices, ETFs, stocks and cryptocurrencies.
If you’re an experienced trader, you can make additional profit by becoming a Popular Investor. Once a part of the eToro’s Popular Investor Program, you can develop trading strategies and get paid when other users copy your trades.
There are four tiers of Popular Investor, each with different requirements and benefits – Cadets, Champion, Elite and Elite Pro.
CopyPortfolios is a longer term investment product for those wanting a diversified portfolio that is automatically managed and rebalanced as needed. There are two types portfolios:
To explore the platform and community, eToro offers a free demo account with a $100,000 virtual account balance.
Trading Signals are available to MetaTrader 4 (MT4) and MetaTrader 5 (MT5) users that want to automate trading via social-copy trading services rather than trading robots (Expert Advisers).
Members of the MetaTrader community can create signals that other users can follow and automatically copy. Over 3,200 free and paid trading signals are available and are ranked by past trading success.
There are two key differences between Trading Signals on MT4 and MT5:
Similarly to eToro’s Popular Investors, if you are an experienced trader looking to make extra cash, you can register as a signal provider and share your trading strategies.
The Top 8 MT4 Forex Brokers in Australia offer low spreads, a good selection of CFDs with cryptos and shares, as well as add-on tools to enhance trading conditions.
Overall, our review found IC Markets to be the best MT4 broker.
There are various brokers that offer MetaTrader 5. Broker’s will offer different CFDs and trading tools, for example Pepperstone provides free Smart Trader Tools, while others add-on social trading tools.
Click here to compare the best MT5 forex brokers.
Thanks to no dealing desk intervention with low spreads, ultra-fast execution speeds and technical analysis tools, we found FxPro to be the best ASIC regulated broker with cTrader.
To compare FxPro’s cTrader offering to other top forex brokers, click here.
Trading forex in Australia has unique but not insurmountable challenges. The best trading platform for Australian forex brokers making a living in the southern hemisphere, far removed from the big financial centres of London and New York, no more difficult than any other aspect of daily life. In an increasingly connected 24/7 world, you can trade forex on a level playing ground in real-time with anyone in the world.
Australian traders seeking to capture profits from online trading currencies in foreign exchange currency markets (forex) face the issue that the times of peak currency market activity are out of sync with Australian time zones. Whilst the Forex market trades 24 hours per day for 5-1/2 days per week, there are many hours when price activity is quiet because of a lack of trader participation.
There are four predominant forex sessions throughout one trading day that are each based on the time in a major financial hub. Those sessions and locations are Sydney, Tokyo, London and New York, with each different session overlapping to a certain degree. By far, the most critical session in which to take part in is the tail end of the London Market and the beginning of the New York market. The four-hour period when those two sessions overlap is when the vast majority of trading activity, even activity related to the Australian and New Zealand dollars, takes place in terms of currency pair price movements.
For someone living in the Australian Eastern Standard Time (AEST) zone, those prime hours when the London and New York Forex sessions overlap are 11:00 PM to 3 AM. Given that you would prefer to be sleeping during those hours, choosing the best trading platform for Australian traders requires various order types and algorithmic trading functions.
No, you do not have to forego sleep to participate in the forex markets. Rather, you can use special order types to set up your trades in advance, go to bed, get yourself a good night’s sleep, and then have a look in the morning when you get up to see how your online trading strategies panned out. Strange as it may sound, trading in this fashion is less stressful, because price analysis, trade entries, exits and maximum acceptable risk are outside times of peak price activity, meaning your emotions will not get the better of you.
Using “Limit” and “Stop” orders on your forex trading platform can help you plan and automate your trades. You will be much more objective without watching trades go in your favour or against you, tick by excruciating tick. Likewise, you can determine logical entry and exit points as well as control your exposure to risk. To new traders, this discovery is a welcome revelation. To those with some experience, it is a solid reality. A good trading platform for Australian traders will take the effect of time zones into account and offer tools to compensate for this.
The best trading platform Australia option should also factor in brokerage fees. There are two main brokerage fees:
The spread is more applicable to forex trading with the difference between the buy and sell (bid/ask) price being the compensation to forex brokers facilitating trading. ECN-like forex trading accounts charge a round trip, flat rate commission fee, where you pay a fixed commission per trade, or more often, by the quantity traded. Commissions are more straightforward than spreads to calculate brokerage fees, hence why experienced traders often opt for these online trading accounts.
For Australian investors requiring an online share trading platform, IG Markets and easyMarkets offer both forex and share trading on their primary trading platforms. Another firm that offers a forex/share trading hybrid is CMC Markets. Alternatively, forex brokers such as Pepperstone, offer CFD share trading on MetaTrader 5.
Justin Grossbard has been investing for the past 20 years and writing for the past 10. He co-founded Compare Forex Brokers in 2014 after working with the foreign exchange trading industry for several years. He also founded a number of FinTech and digital startups including Innovate Online and SMS Comparison. Justin holds a Masters Degree and an Honours in Commerce from Monash University. He and his wife Paula live in Melbourne, Australia with his son and Siberian cat. In his spare time, he watches Australian Rules Football and invests on global markets.