Originally published on ritzherald.com.com
If you’re exploring ways to improve your investment performance, you might be considering algorithmic trading. Experienced investor Daniel Calugar explains that it’s an approach that more and more traders are turning to as a way to optimize, improve and automate their investment strategy.
One of the biggest barriers to algorithmic trading for everyday traders, though, is that algo trading relies on powerful computers and sometimes complex computer code to work. If you don’t have the resources, knowledge, access, or capital to invest in the proper computer hardware and coding, then it’s next to impossible to implement an algorithmic trading strategy at all, let alone one that is successful.
Fortunately, algo trading has become so commonplace today that investing companies have created off-the-shelf algorithmic trading platforms. While there were only a few of these platforms on the market just a few years ago, there are plenty to choose from today.
All of that choice is great, of course, but it can sometimes be challenging to figure out which platform is right for you.
Below, Dan Calugar will present some of the most popular algorithmic trading platforms and explore their features and functionality. He will highlight the programs’ strengths, weaknesses, and unique capabilities to empower traders to make informed decisions when selecting a platform.
This list is in no particular order.
eToro is one of the most respected investment brands in the world. They have more than 20 million traders who use their programs from more than 140 countries. People can invest in a wide variety of assets with eToro, such as traditional stocks, indices, exchange-traded funds and commodities, and cryptocurrency.
The program has a very user-friendly dashboard and downloadable apps available for both iOS and Android.
One of the downsides to eToro is that it doesn’t offer algorithmic trading specifically on the platform. However, one of its best features is that it allows users to copy the positions from some of the top traders on the eToro platform without paying additional fees.
You can browse a list of traders who are using algo trading, see their positions, styles, and approaches, and then copy their trades automatically to your own profile. You can then have this feature run automatically forever or add start-and-stop functions.
The CopyTrader functionality operates in real-time and allows you to set a defined budget. In other words, you don’t have to invest as much as the trader you are copying, but you can replicate the actual trades they’re making within your own budget.
There aren’t additional fees to pay to use CopyTrader, but you are required to deposit at least $200 to utilize the functionality. You must also have at least $1 staked for each position you copy.
Another great feature is the $100,000 free demo account. You can use this demo account as backtesting for a particular strategy or trade, including copying other traders’ strategies.
Pluto is a solid AI automation platform powered by GPT-4 — the language behind the ever-popular ChatGPT. This platform is attractive for traders who either aren’t skilled at writing code or aren’t interested in doing so.
Traders can easily automate investment strategies for even complex portfolios, executing trades instantly whenever pre-defined parameters are met. The platform’s automation capabilities are significant, allowing you to set a variety of vectors by using sectors, presets, triggers, and many more features.
The crux of the Pluto platform is built around AI, allowing you to remove some of the uncertainty involved with manual trading. It has a good backtesting platform that allows you to test out some features based on previous trade data.
The fact that it’s built on GPT-4 means that it’s also easy to use. Traders are able to set their strategy through simple prompts without the need for any coding skills.
Pluto costs $8 per month, which is relatively inexpensive compared to other AI platforms on the market. One downside, however, is that it doesn’t offer a downloadable mobile app, and the mobile support is limited at best.
Interactive Brokers has been around since 1977. Daniel Calugar notes that their longevity in the market adds a lot of legitimacy to their offerings.
Overall, it’s one of the most popular trading platforms, providing investors access to as many as 150 markets. They offer two different account types.
IBKR Lite has no account minimum and is designed for people who want to trade ETFs and equities commission-free. IBKR Pro also doesn’t have an account minimum, but it does have a structured commission schedule based on a variety of factors.
Interactive Brokers is also a very popular trading platform for investors interested in securities, as it offers stocks, futures, Forex, mutual funds, bonds, options, and much more.
One thing to keep in mind is that Interactive Brokers does require some programming skills. They offer an application programming interface that enables traders to customize their own algorithmic trading strategies, providing a lot of flexibility. But you’ll need to be able to code in C++ or Python.
The company provides a huge educational resource library through what it calls Traders University. They also have several algorithmic trading strategies already built in, such as Close Price, Arrival Price, Accumulate/Distribute algo, Adaptive algo, and more. They even provide algo order types offered by third parties such as Credit Suisse First Boston, Quantitative Brokers, Fox River, and Jefferies.
Interactive Brokers provides good mobile support and a downloadable mobile app.
QuantConnect has been in the market since 2011 and started as a resource for quants and engineers who wanted to build algo trading strategies. In 2015, it became completely open source, and in only eight years, it has attracted more than 100,000 users from all over the world.
On the platform, you’ll be able to create your own algo trading strategies for a variety of assets such as cryptocurrency, futures, equities, options and forex. While the program itself costs $8 per month to start, they provide a completely free and impressive backtesting tool to all users.
QuantConnect integrates seamlessly with some of the top brokerage companies in the world, including Coinbase, Kraken and Interactive Brokers.
One thing to remember is that QuantConnect is not for the inexperienced coder. It’s geared toward veterans who are comfortable coding and have experience in algo trading. That being said, if that describes who you are as a trader, then it’s a very good platform.
The platform is host to more than 100,000 algorithms that are live on the site right now, allowing you to analyze other ideas without coding from scratch. There is also a large community of skilled users on the platform regularly, providing less experienced users with a wealth of available advice and support.
Dan Calugar says that TradeStation is a solid compromise between an algorithmic trading platform that requires no code and one that requires extensive code. While this platform technically requires users to be able to code in order to use it, they don’t need to learn complex programming languages.
Instead, TradeStation uses something called EasyLanguage for all algo trading on its platform. This proprietary programming language developed by TradeStation makes it easy for traders who lack in-depth programming skills and capabilities to create customizable trading algorithms that would otherwise be too complex.
Even if you wouldn’t consider yourself a computer programmer or developer, you will have the ability to create intricate and powerful algorithms on the TradeStation platform. It’s extremely easy to use, which is one of the main reasons it’s so attractive to such a broad range of investors.
TradeStation also provides an in-depth educational resource called YouCanTrade. The platform has robust scanning tools and allows users to execute complex trades with ease.
One of the reasons why TradeStation is so popular is the fact that it appeals to both beginning traders and experienced traders alike.
There is no account minimum required and no fees on equities and stocks.
TrendSpider is known for its exceptional visualization capabilities. Traders are able to envisage their strategies easily by using drawing tools that can be applied to any of their charts, whether they’ve been created manually or automatically.
This platform is focused heavily on the U.S. market. It provides access to Chicago Mercantile Exchange futures and equities and also gives users access to the Federal Reserve Economic Data. This provides users with macroeconomic insights to go along with standard data on financial markets.
You will need some coding skills to use TrendSpider, and it’s a platform usually reserved for very busy traders. If that’s you, though, this is a platform you want to check out. You can have as many as 16 charts on each screen, allowing you to monitor the markets as they change and see how your algorithms perform.
The Elite subscription to TrendSpider is $29 per month or $348 if you pay for the year. The Advanced subscription — which gives you access to the platform’s automated trading bots — costs $48 per month or $576 if you pay for the year.
Algorithmic trading is a great fit for the cryptocurrency market, which is considered extremely volatile and ever-changing. If this is a market that you’re focused on, then Coinrule could be a solid algo trading platform for you to consider.
The platform was founded back in 2018 as a way to simplify crypto trading. This simplicity is the top selling point of the platform, and it appeals to traders who are less experienced in cryptocurrency or algo trading in general.
Through the platform’s built-in trading rules, users can create their own unique trading strategy in no time at all. The platform’s dashboard has more than 150 rules already built-in that you can use, or you can decide to build your own from scratch.
These rules will run around the clock, meaning that there aren’t any delays that could lead to missed opportunities. This is especially important in the cryptocurrency market, which is changing all the time.
Coinrule connects with some of the top crypto exchanges in the world, including Coinbase, Bitstamp, Binance, BitMex, Kraken and more. This allows you to easily set up automated trades based on the parameters set through your algorithms
Daniel Calugar points out that Coinrule offers a free plan to start so that you can try all its features risk-free. That membership level allows for a monthly trading volume of as much as $3,000, along with two rules that you can demo, two rules that can go live, one connection with a broker, and seven different template strategies.
After that, they offer a variety of membership levels, with discounts for annual memberships. The least expensive starts at $29.99 per month.
Zen Trading Strategies
Investors who are relatively new to algorithmic trading or wouldn’t consider themselves experts should consider Zen Trading Strategies. This user-friendly platform has plenty of educational resources and many built-in strategies.
This platform integrates a significant educational aspect. It offers free courses for users who want to learn about algo trading in general and how to generate substantial profits from it. The courses even teach traders how to create algorithms on their own without doing any coding at all.
Zen Trading Strategies are able to trade a variety of securities through their multiple partner brokers. Users can customize an algorithmic trading strategy to their liking based on numerous signals and indicators.
The company has several experts on their team who have created algorithms and scripts that users can pull “off the shelf.” The platform’s Tradingview chart will allow you to pick strategies and scripts without any knowledge of how to code. This platform offers a modern design that provides visual elements, which helps to simplify the process for beginning algo traders.
Zen Trading Strategies provides users with one free week of backtesting so users can test their own ideas right from the platform. You won’t be able to backtest any of the indicators that are pre-built into the platform, though.
There are two different subscription options for the platform. The pay-per-month price is $67, while the annual plan is $599.99.
Dan Calugar suggests that another platform beginner algo traders should consider is StrategyQuant. Even if you don’t have much more than basic programming skills, you’ll be able to easily create trading strategies that are unique to you.
This platform is new to the market but has already made some waves thanks to the user-friendly interface. That ease of use will appeal especially to beginners in the algo trading sector, but it’s also a solid fit for experts.
The platform relies heavily on artificial intelligence to help users power their trading strategies. It provides custom indicators that can be used to personalize the features and settings.
StrategyQuant also has a robust backtesting section that allows you to test how your strategies and trading bots perform. An impressive feature of the platform is that once you’ve developed a trading bot through the software, you can export its source code to other platforms, such as MetaTrader4.
The platform also provides helpful guides and resources that you can read before you use the software. There’s even a full eBook that provides detailed instructions on how to use the platform.
StrategyQuant provides a 14-day free trial for all new users so you can see if it’s a platform that would fit your needs.
MetaTrader 4 is a solid program that can help you set up algorithms for trading, though you will have to connect it to a brokerage since it doesn’t offer those services. This platform is now in its fourth generation and is particularly popular among everyday traders.
The software is free for anyone to download straight from the company’s website, and it’s compatible with both desktop-based and mobile operating systems. This great feature provides plenty of flexibility in terms of how and where you can use it.
MetaTrader 4 offers many advanced tools for algo trading, including technical analysis. You can get updates on depth of market and price in real-time, allowing you to stay on top of the markets as they change. The platform offers the ability to set algo trading strategies for both stock exchanges and forex.
One of the better features of the platform is the ability to create various strategies for a variety of financial instruments and then test them all at the same time. The platform also has a large community of users from whom you can draw inspiration and education.
One thing to keep in mind is that while MetaTrader 4 itself is free, you will likely have to pay fees at whatever brokerage you connect it to.