Forex Trading Software Comparison
Forex software utilising robots has gained popular in the retail foreign exchange space through three mainstream platforms:
- MetaTrader’s Expert Advisors
- cTrader’s cAlgo
- IG Market’s Pro-Order
These best forex trading tools are explains in more detail below and a guide is provided to automated forex trading.
The Best Automated Forex Trading Software
Based on popularity the most popular forex trading software platforms are:
1) Expert Advisors (MetaTrader)
The most popular forex trading platform worldwide is MetaTrader 4. This platform and associated best forex broker can be viewed on our Pepperstone MT4 Review.
The reason Pepperstone is considered the best forex trading robot software is the choice of robots available in the MetaTrader market. This marketplace allows robots (called Expert Advisors) to be purchase or rented. There are over 1,700 forex trading robots and 2,100 technical indicators (some of which are free).
The diversity of expert advisors is not the only reason for MetaTrader’s popularity, it’s also the fact you can test them prior to purchase. This is through their demo versions. Bots can also be run through a forex VPS ensuring 24 hour a day potential trading.
2) cAlgo (cTrader)
cTrader is the second most popular forex trading platform and is often the preferred choice from advanced forex traders. We recommend IC Markets for those considering this platform.
cAlgo allows forex traders to build their own custom technical indicators and robots (known as cBots) utilising the modern C# API. C# is one of the most common programming language, is human readable and easy to use. Code can be written using cAlgo’s code editor or Visual Studio. These bots can be back-tested on historical data with detailed logs, loss and profit reports and other data over specified periods.
Similar to the MetaTrader Market, cTrader has the cTDN marketplace where you can download bots based on popularity, performance or rating. The screenshot below shows these bots within the cTDN marketplace.
3) Pro-Order By ProRealTime
ProRealTime is a platform promoted by IG which also offers the two forex trading platforms discussed above. You can view the full details in our IG forex Review.
The automated trading software solution of IG is called Pro-Order). The tool is designed for forex traders to create their own strategies for scratch or by using their assisted creation tools. Strategies can also be adopted from third-parties. All of these robots can then be back-tested for free against up to 30 years of historical data.
The of ProRealTime which ProOrder is part of is $40 each month. This is refunded each month if over three transactions are made that month.
It’s worth considering these elements when creating your own automated strategies:
a) Code quality
The complexity of the indicators utilised can increase the time required to calculate and then execute the order. Programming loops and complexity can decrease performance and increase latency when trading.
b) Money management
When back-testing forex trading software and strategies, results will be impacted by money management strategies. As profit/loss calculations are based on transaction costs these should be considered.
c) Manual And Automated Combination Trading
When an automated forex software robot is active, manual trades can still be made through ProRealTime. These can close or force open new positions which should be considered.
Auto Trading Software Explained
Foreign exchange trading popularity has grown in Australia but a key issue is the time needed watching the market. Time-scarce and sophisticated traders have created robots (bots) themselves or share them between traders.
What Is A Forex Robot?
These robots are computer programs. Based on indicators, they analyse if a trader should buy or sell certain currency pairings. There is no ‘human factor’ with bots which some investors feel is an advantage and they can be the first to trade based on movements. These robots normally will normally will actually make the trade on behalf of the trader even if the forex trading platform isn’t switched on.
Forex robots can be found on currency forums, through some forex brokers and specific websites. It should be noted that robots can’t guarantee a trader results and past-performance doesn’t always indicate future performance. Examples of forex robots include FRT, Golem and Trading Manager Pro. Compare Forex Brokers doesn’t recommend these providers, rather they are included purely as examples.
How Do Robots Work In Currency Markets?
Robots are created by humans who program trading strategies with a set of mathematical rules. The robots then executes directions (buy and sell) for currency pairing based on market conditions which trigger their technical analysis tool.
As robots are human made, their success depends on the programmer, the logic they apply and if the market conditions meet the logic. Programmers will often back-test the robot they create to see how it would of performed in past market conditions. This is often how a robot is evaluated by other traders considering trying the robot. There can be additional tools the robot utilises such as stop-loss order functionality to help manage trades and risk
Why Use A Foreign Exchange Robots?
As discussed earlier, robots don’t require the trader to be always monitoring the market. This can mean more trades can be made and often at a faster execution rate. Trades are also based on computer logic rather then human ‘gut’ which can be a positive and a negative.
Why Not Use Foreign Exchange Robots?
The simplest answer is risk. There is risk in the forms of scams where individuals or companies claim they will guarantee results. Like choosing the right forex broker, its just as important to find a robot provider with a strong reputation. Robots also account for risk differently compared to a human, so they may trade in conditions that some individual traders would avoid.
How Can Traders Compare Bots?
- Knowing The Currency Pairing Traded – robot trade different currency pairings as to have the functionality of all pairings would require too much sophistication. It’s important to know what pairings a robot will trade and to make sure your confident in those. Australian forex traders often will prefer pairings with AUD in the mix.
- Past Profits – Forex robots will often post their past profitability and some also show what their performance would of been based on back-dated data. It’s worth looking at both small and large time-periods factoring in all trading elements to find the right robot.
- Quantity Of Trading – Robots rarely have a single strategy. Rather they have a number of elements suitable for different market scenarios. It’s important to know the number of strategies, technology and number of strategies to find the one that matches your risk profile.
More About MetaTrader 4 and MetaTrader 5
There are thousands of traders of all levels of experience who would not consider using any other trading platform. Forex brokers license this software from the developer, MetaQuotes Software. Brokers sometimes tweak the software, but for the most part, use it as is to provide clients with live streams of currency prices and charts, account management functions and the ability to place orders and manage trades. Both MetaTrader versions are based on the Windows operating system, making it easy for Windows users to get up to speed quickly with Forex trading, at least in as far as the Forex software is concerned. Some brokers have customised MetaTrader to be compatible with the Mac operating system. Since 2007, when the first smart phone arrived on the scene and fundamentally altered the way people approach computing, most brokers have developed mobile friendly versions of MetaTrader.
The primary appeal to traders using MetaTrader is the ability to write trading scripts and Forex robots to automate the entire trading process. This ability is particularly valuable to traders who live in time zones well beyond the zones where most trading takes place.
MetaTrader 4 has been around since 2005. MetaTrader 5 came along in 2010, but it has not come close to supplanting MetaTrader 4 in terms of the number of brokers offering this software or the number of traders. MetaTrader 5 has generally received favourable reviews, but it seems to be a case of providers and users deciding that a reinvention of the wheel was not needed.
One of the primary reasons that MetaQuotes Software released MetaTrader 5 was to provide access to financial markets beyond those that could be traded on MetaTrader 4. For a Forex trader, this is a moot point. Another reason was the “no hedging” rule that the main U.S. regulatory body, the National Futures Association (NFA) placed on the currency markets to prevent traders from being long and short in a currency pair at the same time. Traders quickly learned a simple workaround to the no hedging rule, which was to have sub-accounts where they could be long and short simultaneously without running afoul of the NFA.
The conclusion regarding MetaTrader versions of trading software is that thousands of traders and over 10 years as the leader in Forex platforms is clear indication of its value. It is fast, stable and fairly easy to learn. This allows traders to concentrate their energy on trade setups, trade entry, trade management and trade exit as opposed to managing software.
More About The cTrader Forex Trading Platform
The first, most important, maybe even the only thing, anyone needs to know regarding cTrader Forex software is that it is designed to facilitate Straight Through Processing (STP) trading. This means that buy and sell orders for currency pairs are routed straight to the currency markets via an Electronic Communications Network (ECN). For traders, that mouthful of Forex jargon simply means that the trader’s Forex broker does not handle the order at a dealing desk, where the broker could change the price quotes to the broker’s advantage. Avoiding a broker dealing desk is paramount, but it is mostly a matter of broker selection.
cTrader was designed by a company called Spotware. This software is still dwarfed by MetaTrader for the number of brokers and traders using it, but it is growing in adoption as the growth of automated trading makes its strengths apparent. One of those is the intuitive nature of the platform that makes using it so simple. Spotware has made continuous upgrades and enhancements to cTrader and users who have switched from other platforms enjoy a larger charting area and more trading tools and indicators. Traders interested in automated trading use the equivalent of MetaTrader’s Expert Advisors, a system called “Calgo,” which stands for c-algorithm.
cTrader is also valuable to traders who prefer manual trading and do not wish to devote the time to developing Forex trading robots and algorithms. As far as a comparison between these two Forex software platforms, cTrader has an innovative Depth of Market feature that enables traders to make trading decisions based on three different depth of market criteria, which is valuable for understanding market liquidity, more precise trade entries and the ability to anticipate the buy/sell spreads for brokers that use dynamic spreads for their quotes. cTrader also has versions for Mac and mobile devices of all types.
Traders who change Forex brokers, and many do change, will benefit from both these platforms because these platforms go with the trader, meaning that changing brokers will not require traders to learn new Forex software. Beyond that, the choice is mainly one of preference and many traders gladly use both platforms with very little disruption when switching between the two. View our forex trading platform page to find the right platform and forex broker for your needs.