An automated strategy adopted by experienced traders 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.
As with MetaTrader and their Expert Advisors, certain trading platforms offer automated software and trading robot marketplaces where users can purchase and employ automated trading strategies. The following information assesses automated features of different forex and CFD trading platforms and recommends the top brokers for automated trading in 2020.
By Justin Grossbard / Updated: Saturday, March 07th, 2020
Automated Trading Platforms – Algorithmic & Social Trading
Many brokers allow trading automation via their trading platform. Automation tools allow you to implement your trading strategies without the need to interact with the marketplace. Trading automation will generally consist of either algorithmic trading or social trading. Below different trading platforms are explained with recommendations for brokers’ that offer automated trading tools. First, we look at algorithmic trading platforms followed by social copy trading options.
Algorithmic trading, aka trading robots and Expert Advisors (EAs), are automated trading systems available to retail investors’ trading forex and CFDs. Trading algorithms follow preset instructions to place a trade when market conditions match your trading strategies, optimising the trading experience and maximising returns.
Common Functions of Algorithmic Trading Include:
Automatically open and close positions
Generate signals and monitor for trading opportunities
Manage open positions
Exit trades when pre-set conditions are met
24/7 hour trading
Automated Trading is Popular for the Following Reasons:
Saves time: Trading automation eliminates the need to constantly monitor the market for the right signals.
Free from human emotion and intervention: Trades are opened and closed based on hard data, not human emotion. Fear or greed do not influence decisions that may occur with manual trading.
Faster Calculations: Robots can perform a wider range of calculations as well as accessing a wider range of data than an individual can. Therefore, the scope of market analysis is increased.
Customisable: Automation tools can be customised to meet your preferred trading parameters.
Non-Stop Trading: Automations allows for trading at all hours, even when you are sleeping or unable to monitor market conditions.
Trade High Volumes: Automated software such as Expert Advisors can perform thousands of trades at one time.
1) MetaTrader 4 (MT4) – Expert Advisors
MetaTrader 4 (MT4) is the most popular trading platform offered by forex brokers such as Pepperstone, Plus500, and EasyMarkets.
The ‘Top 5’ main features of MT4 are:
Flexible and convenient trading with three execution modes, as well as two market and stop orders.
Analytic functions: interactive, customisable charts with nine timeframes and 30 technical indicators.
Mobile trading Both iOS and Android devices are supported.
Alerts and financial news to alert traders of targeted events impacting financial markets, and establish potential trading opportunities.
A free demo account to trade virtual funds on a range of markets, develop trading strategies, and backtest against historical data.
MetaTrader 4 – Trading Robots aka Expert Advisors
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 out 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.
Pros of Expert Advisors with MT4
Programming Language
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. 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.
MT4 Marketplace
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:
Over 1,700 trading robots
Over 2,100 technical indicators
Cons of Expert Advisors on MT4
Low-Quality Expert Advisors in Marketplace
The quality of Expert Advisors (EAs) varies significantly, not only on MetaTrader’s Marketplace, but also other automated software providers. Many EAs are free or can be purchased at a relatively low cost and should be researched and backtested prior to being implemented. To validate the quality of an EA, traders can read unbiased reviews from past users as well as assess how the EA performs when backtested against historical data.
Backtesting
Backtesting involves running your tests against real historical data to help with your trading decisions and strategy development. MT4 uses a system called Strategy Tester for backtesting. The product is an excellent tool for backtesting however for comparison purposes there may be the following potential issues:
32-bit memory: MT4 uses 32-bit memory, meaning it will only be able to handle automated trading software designed for 32-bit memory. Memory intensive programs may affect backtesting performance.
MT4 Strategy Tester can only test with one trading instrument (one currency pair in forex markets) at a time. If you wish to trade with many financial instruments, then MT4’s Strategy Tester has limitations.
MT4 can only communicate with one server at a time. If you wish to test multiple EAs at the same time, and there is too much activity on the one trading server, then you may receive the message “trade context busy”.
Reports of backtests carried out by Strategy Tester are only available via HTML file.
Support
MetaTrader 4 does not offer customer support. For this, you will need to contact your broker directly. Due to its enormous popularity, MT4 does offer one of the largest online communities. Therefore if you get stuck or require advice, the experienced MetaTrader 4 community may be able to help.
Access to Marketplace
MT4 does not have an in-built tab to access the trading platforms marketplace. You need to go to MetaTrader 4 marketplace website to research and find EAs.
Contracts For Difference Trading (CFDs)
MT4 is one of the best trading platforms for forex and other CFD instruments such as hard and soft commodities, cryptocurrencies and indices as these instruments trade through decentralised exchanges. Share or Stock trading (ie. not Share CFDs) is run through centralised exchanges (i.e. ASX) and therefore cannot be traded on MT4. Hence MT4’s EAs are not very useful for share trading.
IC Markets Is The Recommended MT4 Automated Forex Broker
Based on the following 10 key factors, IC Markets is recommended to MT4 traders wanting to employ automated strategies:
MetaTrader 5 (MT5) is an upgrade from MetaTrader 4 (MT4) in many regards such as 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:
Four execution modes, six pending order types.
46 analytical indicators, 21 timeframes, and 38 technical indicators.
Full or partial order fills.
Integrated economic calendar, market news regarding economic events, and social indicators.
Depth of market.
Pros of Expert Advisors with MT5
Programming Language
Unlike MT4 which 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 (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 will not be able to use EAs written for MT4 in MQL4 code. The two languages are not compatible.
Access to Marketplace
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 in one place that are easy to access directly via the platform.
Contracts for Difference Trading (CFD)
With MetaTrader 5 you can trade centrally exchange-traded assets. This means you can use Expert Advisors for a greater range of derivatives than MT4, such as for Future or Stock trading.
Backtesting: 64-bit Memory
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:
64-bit memory: Unlike MT4’s 32-bit memory, MT5 can handle Expert Advisors that are both 32-bit and 64-bit. If the program is well written and takes advantage of this memory, then platform performance can be improved resulting in faster-automated trading.
Multi-threaded
MT5 can test multiple financial instruments at one time. This may be important if you have Expert Advisors performing many trades and analysing high volumes of data at one time, or if you are wanting to backtest a strategy against multiple currency pairs.
Unlike MT4, MT5 can communicate with four servers at one time – a trading server, access server, history server and backup server, resulting in increased backtesting capabilities.
Reporting – backtesting can be captured as an Excel file or HTML file.
Trading Speed
MT5 uses 64-bit memory and 4 servers (trading, access, backup and history servers) allowing for faster trading capabilities than MT4. If using EAs, it allows traders to avoid potential slippage due to a high workload.
Cons of Expert Advisors on MT5
Trading Community
MT5 community is not as large as MT4’s, but it is growing and likely to overtake MT4 in the future. Such growth should lead to an increase in available MQL5 EAs.
MT5 Marketplace
As the MT5 community is not as large as the MT4 community, the marketplace is also not as extensive. MetaTrader has started to discontinue support for the older versions of MT4, accelerating the uptake of MT5. As a result, the growth of the MT5 marketplace is increasing.
Pepperstone is our recommended MT5 Broker for Trading Automation
You can view our recommended Pepperstone MetaTrader 5 review to learn more about the forex trading platform and forex broker.
Created by Spotware Systems and released in 2011, cTrader is a trading system designed specifically for retail investors wanting to trade in an ECN (Electronic Communications Networks) environment. cTrader’s key strengths include the execution of trades as well as the platforms extensive charting abilities.
When it comes to trade execution, cTrader allows synchronous execution which means multiple orders can be filled at once, resulting in no order queues and lower risk of trading slippage. In regards to charting features and technical analysis, the trading platform allows up to 50 charting templates and 28 different timeframes.
Features of cTrader include:
70 pre-installed indicators and 28 timeframes.
Level II Market Depth quotes.
Server trailing stops.
Ability to export and download charts from the trading platform.
Trading accounts and templates secured in the cloud.
FIX API.
In May 2018, cTrader was merged with cAlgo and is now called cTrader 3.0. cTrader is now called cTrader Trade and cAlgo is know as cTrader Automate. These functions along with cTrader Copy (the successor to cTrader’s social copying tool cMirror), combine to form a list of powerful modules on cTrader. The merge means users will no longer need to install each app separately.
cBots
cTrader’s cBots and MetaTrader’s Expert Advisors (EAs) are essentially the same algorithmic trading feature. Due to the enormous popularity of MetaTrader, you may even sometimes hear the term cTrader EAs.
Benefits of cTrader’s Automate (formerly cAlgo)
Plug and Play Functionality
cTrader’s Plug and Play feature allow you to load cBots from other users in the cTrader community and commence trading immediately with a click of the play button. This means users can avoid the complicated installation processes that were 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).
cTrader Programming Language
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.
cTrader’s Developer Network
Like MetaTrader, cTrader has a dedicated developer community. Here one can share, discuss and collaborate on useful features such as cBots and indicators.
cTrader Community
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.
Ability to convert EAs on MT4 to cBots
As cTrader Automate requires cBots to be written in C# language, it may be possible to use EAs written for MT4 on cTrader. Before EAs can be used, you will need to convert the EA to cBots. Online code converters can be used, where the EA code is uploaded and converted to a C# cBot.
Automate API
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 when it comes to development.
Backtesting
Visual Testing: To test how a cBot performs against historical ticks or data for a specified period, cTrader provides visual backtesting features.
Optimisation: Optimisation tools allow you to find the best parameters for backtesting your cBots. With these features, multiple backtests can be performed and compared.
Historical Data: cTrader allows you to backtest against historical data for a wide range of symbols.
Statistics: You can review trade statistics such as winning trades, moving averages, net profits and equity drawdowns, which can be matched to profit targets of your backtests.
Backtest History: cTrader will store all your backtesting data so it can be reviewed in the future.
Pepperstone is our Recommended Broker for Automation with cTrader
ProRealTime is designed for traders requiring advanced technical analysis capabilities such as:
100+ technical indicators.
Eight types of orders – market, limit, stop, trailing stop, one cancels the other, one triggers the other, triple orders and oblique orders.
Unlimited timeframe selection.
State of the art market scanning tools to identify securities that match your investment criteria.
20 drawing tools.
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.
Automation Without Programming
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. When these are defined, a code generator compiles the code needed to meet these objectives and parameters.
Automation by Programming
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.
Historic and Real-Time BackTesting
You can backtest against historical data going back several years for a large number of time frames. In addition to backtesting with historical data, you can also test strategies with live market data to simulate live trading by creating a test account.
Offline Trading
Unlike Expert Advisors and cTrader which requires you to have either your computer running or to use a virtual private server (VPS) for your automation tools to run, ProOrder is run via its own server. This means your trading automation can run even if you are offline.
Social Trading with eToro, MetaTrader 4/5 and cTrader
Social Trading: Social copying and social mirroring are trading strategies where you copy other investors’ publicly available trading strategies. As well as traders’ new to forex and CFD trading, social and copy trading is useful for those who do not have the time to develop and execute trading strategies.
Social Copy Trading: when you copy the style of other traders as well as engage and learn from them. In this sense, trading is more communal as you are communicating with other traders via social trading tools.
Mirror Trading: is when you mirror the trading style of other traders without no engagement or communication.
Rather than write code, set up robots or algorithmic tools for your forex or CFD trading, users can utilise social and copy trading software to employ strategies developed by other 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 activities and automatically copy their trading strategies for profitable trades.
Advantages of Social Trading:
Collective Knowledge: Traders can share trading tips and learn from one another.
Copy-Trading Experts: Many social tools have a ranking or rating system in place to identify the most successful traders. By identifying the best traders, others can take advantage of their success and employ their trading strategies.
Simplifies trading: Social trading is great for beginners as the technical and fundamental analysis is not required. Beginners can utilise the research, knowledge, and experience of seasoned CFD and forex traders.
Disadvantages of Social Trading:
A False Sense of Security: Just because you are copying a successful trader or engaged in a welcoming community, does not guarantee you will make money from trading forex. Social and copy trading does not eliminate the high risk associated with forex and CFD trading.
1) eToro – Social Trading with eToro
eToro is one of the more unique trading platforms on the market. 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
The world’s largest social trading network (4.5 million users in over 150 countries).
Social trading tools – follow and copy other traders.
Choice of Forex, Share CFDs, Indices, Commodities and Cryptocurrencies.
Copy Trades – Social Trading with eToro
Social trading with eToro is similar to using Facebook, Twitter or 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 data with monthly and yearly breakdowns of the performance of these traders are provided by eToro. eToro also provides risk profiles on the trader’s portfolio with the ability to action a stop loss with your orders. Copy Trading with eToro offers the following features:
Social news feeds.
The ability to follow and copy the portfolios of other traders.
Search and filtering functions to trace traders that best meet your trading style and objectives.
Newsfeeds to stay up to date on the latest market events.
Ability to view traders portfolio including a breakdown of trading history by month and year.
Risk metric for traders performance.
Countless statistics of different traders performance such as average trades per week and hold time.
Popular Investor Program
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 that copies you, you will receive a payment of up to 2% of the amount each person invests when they copy you.
Copy Portfolios
This is much like an investment fund. There are two types:
Top Trader Portfolio: this combines the best performing and sustainable traders in the eToro network.
Market Portfolios: combines CFD stocks, commodities or ETFs as part of one portfolio.
Partner CopyPortfolio
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 for others to invest. Each person that invests in the portfolio will earn you income.
We recommend eToro for Social Trading Automation
eToro is probably the most well-known platform for social trading. Given the size of the community and its the 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 social trading tools as discussed below. You may consider these options over eToro given these platforms provide superior trading software and features for CFD trading in general.
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.
MetaTrader 4 MQL Signals
The MT4 forex trading platform allows you to automatically copy ‘signals’ of other traders in the MT4 community in real-time.
Benefits
Over 3200 free and paid signals sorted in order of their success.
Ability to leverage the expertise of others in the large MT4 community.
A potential source of income if you others choose to buy your Signal.
Like with MetaTrader 4, MetaTrader Signals are available on MT5. The main 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 its 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 choose to copy.
cTrader Copy is cTrader’s copy trading service that consists of 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. These features are included free as part of the platform rather than as an add-on.
Key Features of cTrader Copy Include:
Risk Management: cTrader Copy comes with tools to help manage your risks when mirroring other trades. These include equity stop-loss, forced stop-loss/take-profit per position, volume percentage and mirroring direction.
Copying Control: Real-time controls on when the commencement and exit of the mirroring process occurs.
Transparent: Ability to see Strategy providers profile, trading history and positions open.
Analytical Tools: In-depth charts such as ROI, Balance and Equity as well as trading success statistics.
Our Recommended Automated Forex Brokers
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 platform guides including the following comparisons:
1) MetaTrader 4 (MT4) – Expert Advisors
2) MetaTrader 5 (MT5) – Expert Advisors
Pepperstone is our recommended MT5 Broker for Trading Automation
3) cTrader – cTrader Automate cBots
Features of cTrader include:
cTrader Programming Language
4) ProRealTime – ProOrder
We Recommend IG Markets for ProOrder
Social Trading with eToro, MetaTrader 4/5 and cTrader
1) eToro – Social Trading with eToro
Copy Portfolios
MetaTrader 4 MQL Signals
