5 Best Automated Trading Platforms of 2023
Over 80% of the entire trading volume on the U.S. stock exchanges is driven by computerized trade execution. Institutional investors like hedge funds dominated this sector with high-frequency trading for a long time. Now, retail traders can execute trades automatically thanks to big data and the best AI stock trading software solutions and apps.
Accessing tick-by-tick data and API connections between trading software and broker platforms is more user-friendly and convenient than ever before. This way, even beginners can use trade automation, develop trading strategies, automated trading systems and execute trades on autopilot.
Below you will find the best automated trading platforms, brokers and tools that help you automate your daily trading routine.
Best Automated Trading Platforms
- Trade Ideas: Best Automated Trading Software for U.S. Stocks
- TrendSpider: Best Trading Bot Platform with Technical Analysis
- Interactive Brokers: Best Automated Trading Platform Broker API
- Black Box Stocks: Best Automated Trading Software for Trading Options
- NinjaTrader: Best Automated Trading Robot for Futures Trading
1. Trade Ideas – Best Automated Trading Software for U.S. Stocks
Trade automation can be done using the API connection of a stock scanner like Trader Ideas to route artificial intelligence based trading signals directly to a direct access broker like Interactive Brokers and E-Trade.
The best automated trading platforms enable users to trade fully automated based on pre-defined conditions and criteria.
Once the trading robot identifies the trade setup, the order can be routed automatically to the broker to execute it fast. Trading on autopilot is possible with Trade Ideas.
Real time streaming stock prices, the best backtesting software capabilities, and the freely configurable stock screener settings make Trade Ideas one of the best automated trading software solutions for day traders. It is easy to define a new trading system, even without coding knowledge.
Costs: Automated trading requires a Trade Ideas Premium subscription, which costs $167 per month or $1,999 per year. Backtesting, chart-based button trading, price alerts, simulated trading and chat room access is also included.
2. TrendSpider – Best Trading Bot Platform with Technical Analysis
TrendSpider is a high-end stock analysis platform with extensive capabilities for technical analysis and fundamental research. Up to 16 charts can be monitored at the same time, hundreds of trading indicators are available, and manual and automated drawing tools help to visualize trends, support and resistance zones.
The integrated trading bots feature lets you automate strategies without writing code in programming languages such as C# or C++. Instead, everything works with drag and drop and value inputs. Users can turn every trading strategy into a fully automated trading system. In addition, trading signals can be streamed to a discord server or Twitter, or for routing trading bot buy and sell signals directly to the broker to place trades in a brokerage account.
The integrated stock screener helps to find better trade setups faster. Evaluated setups and strategies can be tested using the reliable TrendSpider backtesting engine. In addition, TrendSpider supports the Federal Reserve Economic Data (FRED) with thousands of economic data metrics. The history of economic data can be plotted below a chart to evaluate correlations between economic data and financial markets.
Costs: Automated trading bots are available with TrendSpider Elite for $29 per month or $348 per year and alternatively with the TrendSpider Advanced for $48 per month or $576 per year.
3. Interactive Brokers – Best Automated Trading Platform Broker API
The Interactive Brokers API is one of the most robust brokerage solutions for automated trading systems. Developers use the API to build custom trading apps, develop commercial finance and trading software, and integrate trading functionalities into their existing front-ends and apps.
The API is so popular that many market-leading trading tools have already integrated connections to Interactive Brokers. The benefit is that trading tools, SAAS solutions and self-developed trading system front-ends can transmit the buy and sell orders directly from the external platform via API to Interactive Brokers for the order handling routines.
For example, traders can connect their Trade Ideas Pro platform to Interactive Brokers to execute stock trades on Nasdaq, NYSE and AMEX. Also, Trade Ideas A.I. buy and sell orders can be routed automatically to IB.
Costs: Interactive Brokers offers their clients two pricing tiers: IBKR Lite for U.S. residents and IBKR Pro for all users worldwide.
IBKR Lite caters to retail investors that are residents in the United States looking for commission-free trades on US stocks and ETFs but without automated trading capabilities.
In contrast, IBKR Pro is catered towards active traders looking worldwide to achieve the best price execution with each trade at a low cost with automated trading functionalities.
In addition, IBKR Pro clients can choose between a tiered and fixed commission structure, where the commission on US stocks is USD 0.005 per share for fixed and between USD $0.0005 and $0.0035 per share for tiered commission plans.
4. Black Box Stocks: Best Automated Trading Software for Trading Options
Black Box Stocks automation features include automated stock and options scanners (including dark pools) that automatically find trading opportunities in the market and automated one-click order ticket submission to brokerage accounts.
The fully automated dashboard updates trade signals, charts, top lists and options flow analysis with real-time prices. Applied studies, indicators and even dark pool volume profile data update automatically and help identify support and resistance levels.
The trade alerts are color-coded and consistently identify new trading opportunities in real time with various filter options. Those alerts include pre-market, price spike, alpha gold and retracement alerts for stocks, and multiple options alert types, including swift bullish and repeater bullish signals.
In addition, Black Box Stocks already fully integrates with E*Trade and TradeStation, which enables users to trade directly from the Black Box Stocks tool via web API integration. The trades get automatically transmitted to the broker platform. Soon, tastytrade will be integrated.
Costs: Black Box Stocks costs $99.97 per month. Alternatively, it is possible to sign up for $959 per year. Here you can subscribe with a 20% discount (discount will be applied automatically during signup).
5. NinjaTrader – Best Automated Trading Robot for Futures Trading
NinjaTrader is one of the best algo trading software tools that uses a version of C# called NinjaScript as the programming language. The automated trading platform requires an installation and can be installed on Windows.
It offers various charting and technical indicators that traders often use to determine trade signals and automated trading software tools such as Expert Advisors (EAs), the most popular A.I. tool for day traders in stocks indices, futures and forex.
NinjaTrader integrates with NinjaTrader Brokerage, forex. com, FXCM, Interactive Brokers, TD Ameritrade, Multibroker and CQG.
Costs: NinjaTrader is free as long it is used for developing and testing purposes. Live trading is only possible with the paid version. The lease model comes for $99 per month, while the lifetime license costs $1,499.
Best Automated Trading Platforms: Conclusion
Automated trading systems are an excellent tool for retail traders looking to automate their trading. However, many factors must be considered before automating your trading systems and a few post-automated trades steps you should review during its use.
One of the main benefits of using automated trading software is that human emotion is taken out of the trading process, which reduces human error, avoids the fear of missing out and improves order execution speed.
Still, there are a few disadvantages since trading system development requires a reasonable amount of time to get to a state where trades are really executed on autopilot without human involvement.
Unfortunately, only a few trading platforms from leading brokerages are good enough for trading system development and automated trading system executions right now. Most auto trading software tools require a front-end tool with market data subscription and get connected via API to a brokerage trading platform for trade execution.
As a retail trader, you use automated trading platforms to improve your trading, save time, and increase profitability, while it is still more beneficial for institutional investors with servers close to the stock exchange with ultra-low latencies. So, you should be aware of heavy competition. Any new trading strategy should be tested in a simulated environment before trading it with real money.
How to Get Get Started
To get started using automated trading software, you need to define your trade entry and exit parameters in the first place. Once you have finished the definitions process, it’s time to use the tool of your choice to combine the needed if-then-else clauses to automatically create the buy and sell orders.
While automated trading systems are easy-to-use tools that don’t nessearaely require programming or coding knowledge, it’s still beneficial to have a good understanding of if-then-else logic and variables that can be used for trading system definitions.
Pre-defined trading strategies are a good starting point for beginners. The trading system can either be used 1:1 as pre-defined, or changes can be made based on your specific requirements. Most tools also have a code-based add-on, where knowledgeable trading system developers can write their scripts line by line. Still, the majority of retail traders will use drag-and-drop solutions, where parameters like moving-average length are entered via keyboard within a pre-defined form.
Automated Trading Requirements
Automated Trading systems typically require the use of a fast and reliable broker, a software-based trading platform and a computer.
Automated Trading systems can be either discretionary or systematic:
- Discretionary traders rely on their own skills to make trade decisions while. In this case, the trading system generates the signal, but the trader finally decides whether to take the trade or not.
- Systematic traders follow precise rules for both trade entries and exits that have been pre-programmed. The computer takes care of all entries and exits, and all orders are transmitted automatically.
Key Benefits of Automated Trader Software
The key benefits of automated trading systems are:
Efficiency via automation: Traders do not need watch charts all day long; they only need to allocate their time for strategy selection, backtesting and optimization instead of trading manually all day long.
Unbiased Trading: Automated trading systems are not subject to the emotional bias inherent in human decision-making, which can lead to costly errors as well as missing opportunities. Automation helps traders avoid the emotional tendency which is inherent in trading.
Ease of use: Automated trading systems are available for all levels of expertise and can be customized easily to suit individual needs.
Cost efficiency: Trade execution costs are low as there is no need to pay commissions or platform fees since the introduction of zero commissions across most U.S. brokerages.
Trade diversification: Trade diversification is a vital profitability factor and is complex to do when trades are executed manually. But trade automation can execute trades across various markets and exchanges automatically.
Higher returns: The increased diversification of automated trading systems leads to higher returns on investment due to market efficiency and reduced risk exposure.
Disadvantages of Automated Trading Systems
Automated trading systems have many advantages, but there are also some downsides traders should be aware of.
High slippage risk: Automated trading systems are subject to slippage, the difference in price between what is expected and what occurs when an order goes into the market. For example, if a trader predicts that Microsoft shares will trade at $350 per share but instead trades for $349.75 or less, they have experienced negative slippage of 25 cents. Trading systems typically trade more frequently, and the slippage can cumulate to a meaningful amount.
Computer outage: Automated trading systems are susceptible to downtime due to a breakdown, power outage or Internet connection failure.
Costs: Automated trading systems require fees for the service itself and also any third-party software that may be required in order for them to function correctly.
Hard to customize for beginners: Customizing an automated trading system requires hours of programming time by specialized programmers with knowledge about financial markets if systems get complex.
Speed: The speed of execution of an automated trading system can be a significant factor for traders.
What to do before you start automating your trading systems?
Before you begin automating your trading systems, you need to define the exact parameters of the trading setup that you want to automate. Exact entry and exit parameters are needed to entirely automate the trade entry and trade exit process.
What to do after automating your trading systems?
Once the trading system is fully automated, it only needs activation of the relevant automated trading strategies, and the computer will take care of the trade executions as defined. Once the system is active, you need to monitor the trade execution process to ensure that especially new systems work as intended. The results and profitability factors can be used to adjust and optimize parameters and enhance definitions via backtesting routines.
What is the best automated trading software?
The best automated trading software for day trading U.S.-listed stocks is Trade Ideas. You can connect the tools with your E-Trade or Interactive Broker account and use the integrated API for automated trade executions (more brokers will be supported soon).
Do automated trading systems work?
Yes. Automated trading systems work. Combining high-end trading tools and reliable brokers makes it possible to trade fully automatically. You begin with defining the trading signal criteria. Then the automated trading system identifies the setups and sends the buy or sell order to the broker and then the broker to the exchange without any human involvement. Still, you should monitor the trade executions to ensure the accuracy of the coded trade processing.