Automated Forex Trading – Platforms
In our previous automated forex trading post, we discussed the benefits of automated trading – the ability to monitor the market 24 hours a day, execution of your strategy without emotions and the potential to build an automatic money machine. We introduced two systems as examples, the FXCM system selector and Trade Robot.
This article builds on the introduction, discusses what is needed for automated forex trading, identifies some additional automated trading platforms and briefly outlines the cost and features of each system. Read the rest of the article to find out more.
How does an automated forex trading system fit together?
Automated forex trading has four essential parts:
- Broker – the broker executes your orders in the market and provides order confirmations and revalues your position against the market
- Data feeds – this is often provided by the broker. You need data feeds so that your trading model has the information needed to generate buy and sell signals.
- Platform that provides the connection between the trading system and the broker / data feeds – this is a key element. This software gets the latest trading data and sends your orders and receives back confirmation.
- Trading system – this uses the data feeds to generate buy and sell signals. This may be standalone software, or use Tradestation, Metastock, Wealthlab or similar software.
Our previous simple automated trading example systems had these parts combined. For example, FXCM’s system selector has them combined into one system. Trade Robot provides the platform and trading system (or you can provide this) and relies on the broker for trade execution and data feeds.
Generally, you will need to develop and backtest your trading system outside of these platforms – they strictly execute the trades.
The remainder of this article will discuss some of the platforms that are available to connect your trading system to the broker.
Forex trading platforms compared
This section has a number of trading platforms, and some basic facts on each. Each platform is compared using the following criteria:
- Trading software supported
- Broker(s) supported
- Cost (initial and ongoing)
- Notes – other features
Trade Robot
| Link | |
| Trading software supported: | TradeStation 2000i, TradeStation 8, e-Signal, Intellicharts |
| Broker(s): | FXCM |
| Cost: | $500 |
| Notes: | Also has proprietary systems available. Can work with trading systems developed in TradeStation Easy Language |
Meta Trader 4
| Link | |
| Trading software supported: | Proprietary |
| Broker(s): | FXCM, Gain Capital, MIG Investments, FXDD, Interbank FX and many others |
| Cost: | Free |
| Notes: | Has versions for PDAs and Smartphones. Another version can manage multiple simultaneous accounts |
HyperOrder
| Link | |
| Trading software supported: | TradeStation 2000i, TradeStation 7/8, MetaStock Pro, eSignal, custom |
| Broker(s): | Interactive Brokers Workstation, Patsystems, MB Trading, FXCM, RefcoFX, Man FX, MetaTrader |
| Cost: | Free (optional charitable donation) |
| Notes: | Also has an SDK available for custom development. |
NeoTicker
| Link | |
| Trading software supported: | Proprietary |
| Broker(s): | Interactive Brokers Workstation, MB Trading, FXCM, EFX Group, open e cry |
| Cost: | CAD $1497 (can also pay monthly lease) |
| Notes: | Depending on the broker, also supports stocks and futures as well as forex trading. |
Thinking Stuff
| Link | |
| Trading software supported: | Proprietary (uses mouse clicks rather than a programming language) |
| Broker(s): | Oanda, Gain Capital (demo only) |
| Cost: | Free trial version Backtesting: $20 per month Alerts: $20 per month Auto Trading: $30 per month |
| Notes: | Also includes access to historical data, and you can choose from trading rules. Includes a backtesting feature |
NinjaTrader
| Link | |
| Trading software supported: | Proprietary |
| Broker(s): | FuturesBetting.com, Gain Capital, Hotspot FX, Interactive Brokers, MB Trading, Patsystems, PFGBEST.com, TD Ameritrade, Trading Technologies, Zen-Fire |
| Cost: | Varies. Can be used for free through brokers, purchased outright for $995 (single broker) or $1495 (multiple brokers) or leased from $50 per month |
| Notes: | Includes a backtesting feature and trading rule building feature. |
Conclusion
These are some of the more versatile platforms that support automated forex trading. Some simply connect the broker and your trading system (running in a separate package), while others are a complete solution. Cost varies according to the functionality provided, but most are fairly affordable for what is provided.