An automated strategy requires a programming language to create and develop trading robots. When using algorithmic trading strategies, buying and selling of financial instruments is executed automatically and can be backtested on historical market data.
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The best platforms for algorithmic trading are the following.
While 70% to 80% of shares are traded using automation the figure is higher for currency with 90% of forex trading using robots. Most forex brokers offer trading automation via their trading platforms or third party software. Automation tools allow you to implement your trading strategies without the need to interact with the marketplace.
There are two principal ways to approach trading automation, either algorithmic trading or social-copy trading. Below we explain the features available on different trading platforms, with recommendations for top broker’s that offer these automated trading tools. First, we look at algorithmic trading platforms followed by social copy trading options.
Algorithmic trading is where you utilise trading robots, known as Expert Advisors (EAs) within the MetaTrader community, to automate trading. Trading algorithms automatically monitor markets and enters or exits trades when market conditions match your EAs preset parameters, optimising your trading experience, and maximising returns.
View our specialised forex trading robots page to learn more.
MetaTrader 4 (MT4) is the most popular trading platform offered by forex brokers such as Pepperstone, Plus500, and EasyMarkets.
MetaTrader 4 (MT4) offers trading robots called Expert Advisors (EAs) that automatically execute orders based on predetermined rules and market conditions. EAs utilise algorithms to buy and sell financial instruments as well as monitor market conditions, automatically seeking potential trading opportunities for investors.
By setting your trading parameters or pre-set trading rules, Expert Advisors can alert traders of opportunities or risks when trading signals match your conditions.
MT4 uses MetaQuotes Language 4 (MQL4) which is similar to the C programing language. After learning the MQL4, it is simple to create and develop your own Expert Advisors (EAs). C language is the 5th most popular language on GitHub, so access to developers with an ability to code in or learn MQL4 should be high.
Due to the popularity and long shelf life of the MT4 platform, MT4 has one of the largest trading platform marketplaces. MT4 offers one of the most extensive collections of EAs, algorithmic tools and technical indicators in the retail CFD and fx industry. In MetaTrader’s Marketplace you can find:
The quality of Expert Advisors (EAs) varies significantly, not only on MetaTrader’s Marketplace but also on other automated software providers. Many EAs are free purchased at a relatively low cost. To ensure it is a quality trading bot, it is recommended to research and backtest the EA prior to execution. To validate the quality of an EA, traders can read unbiased reviews from past users, as well as assess how the trading bot performs when backtested against historical data.
Backtesting involves running your trading strategies against real historical data to help you develop optimised EAs. MT4 offers a Strategy Tester feature for backtesting. The product is an excellent tool for backtesting, however, for comparison, there may be the following potential issues:
MetaTrader 4 (MT4) does not offer customer support. For this, you will need to contact your broker directly. Because of its enormous popularity, MT4 offers one of the largest online communities. Therefore, if you get stuck or require advice, the experienced MetaTrader 4 community may provide answers.
MT4 does not have an in-built tab to access the trading platform’s marketplace. You need to go to MetaTrader 4 marketplace website to research and find EAs.
MT4 is one of the best forex and CFD trading platforms with access to different markets like hard and soft commodities, cryptocurrencies (Bitcoin and altcoins) and indices as these instruments trade through decentralised exchanges. Share or stock trading (not share CFDs) runs through centralised exchanges (i.e. ASX). Therefore, you cannot trade shares on the platform and MT4’s EAs are not very useful for share trading.
MetaTrader 5 (MT5) is an upgrade from MetaTrader 4 (MT4) in terms of market access to more asset classes, a simpler coding language, and improved backtesting capabilities. Unlike MT4, MT5 is a multi-asset platform meaning users can trade derivatives that require access to centralised exchanges like shares and futures.
The MetaTrader 5 platform offers the following features:
Unlike MT4 that uses MQL4 (based on C programming language), MT5 uses MetaQuotes Language 5 (MQL5) based on the C++ programming language. C++ is more popular than C (the 4th most popular language on GitHub) as it is an object-oriented language and better quality than MQL4. However, MetaQuotes decision to offer MQL5 rather than MQL4 means you cannot use EAs written for MT4 in MQL4 code. The two languages are not compatible.
MT5 has an inbuilt Marketplace tab on the platform. Unlike MT4, which requires you to crawl through multiple websites to find your desired MT4 Expert Advisor, MT5 has all your apps within one tab, inbuilt into the platform.
With MetaTrader 5 you can trade centrally exchange-traded assets, making market access much better on the newer platform. This means you can use Expert Advisors for a greater range of derivatives than MT4, i.e. future and stock trading.
MT5 offers superior backtesting capabilities when compared to MT4. Like MT4 it also uses Strategy Tester however, MT5 is a more powerful automated trading platform. It offers the following features:
MT5 community is not as large as MT4’s, but it is growing and likely to overtake MT4. Such growth should lead to an increase in available MQL5 EAs.
If you trade using Pepperstone’s Razor Account, you will be trading with ECN style execution. ECN style execution means trading with no dealing desk. This means the spreads you trade with are determined by the liquidity provider, not by Pepperstone.
When trading forex on MT4, commission spreads can be as low as 0.0 pips for major currency pairs. With tight spreads and low commission fees of $3.50 sideways and $7.00 round-turn, Pepperstones Razor Account is ideal for Expert Advisors and automated trading strategies.
The table below shows Peppersone’ss Markets average spreads for popular forex pairs. As you can see, IC Markets Raw Account offers the tightest spreads across the board.
Data taken from broker website. Accurate as at 04/06/2021
The combination of MT5 and Pepperstone is popular due to its access to different markets and asset classes, automated trading systems, and technical analysis tools. To open new accounts, a low minimum deposit is required, and you are provided different pricing structures with commission and no commission trading available.
You can view our recommended Pepperstone MetaTrader 5 review to learn more about the forex trading platform and forex broker.
View Pepperstone Review >>Visit Pepperstone >>
Created by Spotware Systems and released in 2011, cTrader is a trading system tailored for retail investors wanting to trade in an ECN (Electronic Communications Networks) trading environment. cTrader’s key strengths include the execution of trades plus the platform’s extensive charting abilities.
With trade execution, cTrader allows synchronous execution (meaning multiple orders can be filled at once), resulting in no order queues and a lower risk of trading slippage.
Regarding charting features and technical analysis, the trading platform allows up to 50 charting templates and 28 different timeframes.
Features of cTrader include:
cTrader’s cBots and MetaTrader’s Expert Advisors (EAs) are essentially the same algorithmic trading feature used for auto trading. Because of the enormous popularity of MetaTrader, you may even sometimes hear the term cTrader EAs.
cTrader’s Plug and Play feature allow you to load cBots from other users in the cTrader community and start trading immediately with a click of the play button. This means users can avoid the complicated installation processes previously required. Users’ can access these trading robots via the ‘Automate’ tab found on the platform with more available to download from cTDN (also via the trading platform).
cBots are written using C#. A trader can build cBots using the inbuilt code editor or using the visual studio, yet the code editor makes coding as straightforward as possible.
Like MetaTrader, cTrader has a dedicated developer community. Here you can share, discuss, and collaborate on useful features such as cBots and indicators.
cTrader Automate provides access to the cTrader forum, library, and consultants. Such resources can help you make the most of the features cTrader Automate offers.
As cTrader Automate requires you to write cBots using C#, it may be possible to use EAs written for MT4 on cTrader. Before you can use EAs, you will need to convert the EA to cBots. You can use online code converters, where you upload the EA code and convert it to a C# cBot.
cTrader Automate API gives you access to all the data you will need to develop a robot or indicator, including market data and trading functions. The Automate API feature can save a significant amount of time developing automated trading strategies.
View FxPro Review >>Visit FxPro >>
ProRealTime is designed for traders requiring advanced technical analysis capabilities such as:
ProOrder is the ProRealTime tool for automatic trading and backtesting. The platform is only available via a web browser with an internet connection. The trading platform allows for automation via three main methods – Wizard, Code and via the ProRealTime Marketplace.
Along with NinjaTrader, Thinkorswim and eSignal, ProRealTime is dedicated more towards professional traders who want direct access to several asset classes, including stock markets.
ProOrder’s wizard allows you to create and define your own trading requirements without the need to write code. Using the wizard, traders can define conditions, objectives and stops (stop loss, order entry) with easy drop-down menus. Once defined, a code generator compiles the code needed to meet these objectives and parameters.
You can write your own automation using the ProBuilder language. ProBuilder is very similar to Visual Basic. Given the ProRealTime community is not as large as other communities such as MT4 plus the decreasing popularity of Visual Basic, it is possible you may face difficulty when finding the right resources to meet your development needs.
You can backtest against historical data going back several years for many time frames. Besides backtesting with historical data, you can also test strategies with live market data to simulate live trading by creating a test account.
Unlike Expert Advisors and cTrader that require you to either have your computer running or to use a virtual private server (VPS) for your automation tools to run, ProOrder operates via its own server. This means your trading automation will continue even if you are offline.
View IG Markets Review >>Visit IG Markets >>
Social trading (aka social copying and social mirroring) is when you copy the publicly available trading strategies of more experienced traders. While social-copy tools are a great way to automate trading if you are new to forex and CFD trading, social-copy trading is also useful for those who do not have the time to develop and execute trading strategies.
Rather than write code, set up robots or implement algorithmic tools, users can utilise social trading software to copy strategies developed by more experienced traders. Social trading opens up forex trading to everyone because it removes the sometimes complicated process of setting up EAs and cBots.
Social trading services allow you to follow successful and experienced traders, see their trading activity, and automatically copy their trading strategies for profitable trades.
Advantages of Social Trading:
Disadvantages of Social Trading:
eToro provides a unique account mirroring service as it offers you a pure social trading platform. This is because the key feature of the trading platform is social trading. The eToro platform is a community of traders who want to copy others or want others to copy their own trading strategies.
Key Features of the Platform
Social trading with eToro offers similar features to Facebook, Twitter and other social media platforms. With copy trading, you can copy the portfolio of traders who also trade with eToro. You won’t be copying blindly as eToro provides monthly and yearly breakdowns of a traders performance. You can also view each trader’s individual risk profiles on their portfolio, with the ability to activate a stop loss with your orders. Copy trading with eToro offers the following features:
You can earn a second income if you have a unique or interesting investment strategy that results in other trader following and copying you. For every person who copies you, you will receive a payment of up to 2% of the amount each person invests when they duplicate your strategy.
This is much like an investment fund where you invest in a diversified bundle of asset classes and financial instruments. There are two types:
This is much the same as Copy Portfolio, except you create your own investment fund. You are then responsible for managing, distributing, and promoting the portfolio to others. You will earn income for each person who invests in the portfolio you created.
eToro is probably the most well-known platform for social trading. Given the size of the community and its wealth of social trading options available, it is likely the best pure social trading platform around. However, there are other options. MetaTrader and cTrader both offer their own proprietary social trading tools as discussed below. You may consider these options over eToro given these platforms provide superior trading software and general tools designed for CFD trading.
MQL Trading Signals is MetaQuotes social trading feature available on both MetaTrader 4 and MetaTrader 5. Members in MetaTrader’s established trading community can create ‘Signals’, which other community members can follow and copy.
The MT4 forex trading platform allows you to automatically copy ‘signals’ of other traders in the MT4 community in real-time. If you are a beginner trader, it may be an easier approach to automating trading compared to EAs.
Open a demo account >>Visit IC Markets >>
Like with MetaTrader 4, MetaTrader Signals are available on MT5. A key difference is that MT5 comes with a Signals Tab built into the platform, making it far easier to find and employ signals.
The other difference is that the MT5 community is not as large as the MT4 community, meaning the choice of signals is not as large. However, this is not an issue as it is the quality, not the quantity of the Signals that matter. To gain access to Signals, you need to pay a fixed fee to access the copy trading feature and potentially each broker you copy.
View Markest.com Review >>Visit Markets.com >>
cTrader Copy is the software providers’ copy trading service offering risk management and in-depth strategy profiles tools to assist with safer copy execution. cTrader Copy improves on the best features of cMirror and PAMMS. It includes the free features as part of the platform, rather than as an add-on.
Key Features of cTrader Copy Include:
Based on the trading conditions, range of markets, and forex spreads, we recommend Markets.com to MT4 traders wanting to focus on automated trading strategies.
The broker is well-respected worldwide thanks to top-tier regulators including ASIC in Australia, CySEC in Europe, The FCA in the UK, and FSCA in South Africa. Traders outside these regions will receive regulation from BVI.
Markets.com’s pricing and execution engine ensure order execution quality. This means that your automated trades will get the best fill prices with minimal slippage and no-requotes. MetaTrader 4 only support the 32-bits version, which may run slower. So, it’s important that the broker’s infrastructure compensate for this disadvantage and offers a more efficient order execution model.
At Markets.com most orders (86%) are executed with zero or positive slippage. Only 13.79% of all orders were filled with negative slippage.
One of the benefits of choosing Markets.com is that you don’t just get access to MetaTrader 4 and MetaTrader 5 trading platforms. All clients of Markets.com get a Marketsx trading account by default and through this account, you can access both Marketsx trading platform and MetaTrader trading platforms.
This means you can get all the benefits MetaTrader 4 offers plus the benefits of Marketsx (or Marketsi) and the unique range of features the Markets.com trading platforms offer. Such as their wide range of fundamental, technical, and sentiment trading tools that other platforms do not have.
The best expert advisors are no good if the broker doesn’t offer excellent spreads for trading and Markets.com delivers on this. Markets.com only has a commission-free account and even though Markets.com is a market maker, they offer the same tight spreads regardless of which trading platform you use.
The below table shows a sample of the spreads Markets.com. These spreads are very good and can match or better spreads that ECN style trading accounts offer. We witnessed spreads for the EUR/USD pair of 0.60 which is a very competitive spread by any measure.
There are two main approaches to automating forex and CFD trading. Social-copy trading brokers and platforms allow you to copy the strategies of more experienced traders’, eliminating the need to conduct your own analysis and place orders. The other option is algorithmic trading, where you use trading robots often referred to as Expert Advisers (EAs) to fully automated trading.
Yes, automating trading with bots and Expert Advisers (trading robots) is legal.
Automated trading with social-copy or algorithmic trading tools can be profitable, yet CFDs are complex instruments that come with a high risk of losing money, regardless of your trading strategy. To find out more about forex and CFD trading, along with the risks involved, click here.
If you are unsure if MetaTrader 4 or MetaTrader 5 is more suitable for yourself, we have a created an MT4 vs MT5 guide designed for those considering Pepperstone. You can also view our country’s platform guides, including the following comparisons:
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.