🤖 Comparison of brokers in automated trading

Automated trading uses software that places market orders automatically. Orders are executed based on statistical analyses, market signals, and fundamental and technical data, adjusted according to the program’s algorithm. These programs must be updated regularly, but they remain operational around the clock and can optimise performance by making decisions aligned with general trends and short-term market fluctuations. There are also trading robots that engage in copy trading by identifying the highest-performing traders and replicating their trades.

Execution speed, the ability to synthesise large amounts of data, and reactivity are the essential qualities of trading robots. Trades are executed extremely quickly and emotional errors are eliminated. Thousands of transactions can be processed in milliseconds, thus adding market liquidity. Furthermore, multiple strategies can be tested and backtested to select the most effective one. Finally, trading robots can save the trader a great deal of time, removing the need to monitor screens constantly for opportunities and risks.

It is possible to develop your own trading robot, provided you have the necessary skills in programming and finance. You must also determine on which platforms this trading program can be executed.

Building a trading bot starts with defining a strategy, then moving on to development (coding the strategy), followed by backtesting to ensure the robot works properly, then parameter optimisation, and finally testing on a demo account.

Programming errors, outdated software, market volatility, and poorly tuned parameters are some of the risks involved in using trading robots. Significant financial losses can occur when these risks materialise. There is also a risk of over-reliance on a trading bot, whereas unexpected events can invalidate your algorithms and lead to losses if not carefully monitored.

Two main approaches can be automated using trading robots:

• The first approach relies on technical analysis for decision-making, while the second is driven by fundamental analysis. Technical analysis scans an asset’s price history and considers hundreds of parameters to detect predictable patterns and capitalise on them through numerous trades.
• Fundamental analysis, on the other hand, reviews the financial sector to extract profitable investment ideas based on financial and macroeconomic indicators. Macro announcements, for example, are closely followed, and those likely to trigger big price moves lead to trades. Your investment strategy allows you to select the right software for you—some trading robots even combine both approaches (technical and fundamental) to maximise potential gains.

Robots can also be programmed for specific trading styles, such as day trading (exploiting intraday fluctuations) or swing trading (holding positions over a slightly longer period).

More and more platforms allow automated trading. Among the most popular trading platforms are ProRealTime, MetaTrader 4, and MetaTrader 5. ProRealTime’s “ProOrder” is an automated trading module that facilitates straightforward, efficient trade automation. On MT4 and MT5, you can access various pre-built trading robots, as well as the option to code your own automated trading programs (in the MQL4 language for MT4, and MQL5 for MT5).

Make sure to use a regulated broker when running a trading bot.