Popular Platforms for Automated Trading

Automated trading makes it easy for investors to quickly execute and trade on their investment thesis. However, despite its many advantages, a steep learning curve is involved. The good news? More than a few automated trading platforms offer easy-to-use tools to help new traders get started. 

In this guide, we’ll discuss how these platforms work, their various types, and how to level up automated trading strategies or begin algo trading. We’ll also review a list of some of the best automated trading platforms to help you get started.

What are automated trading platforms? 

Automated trading platforms are digital interfaces that enable automated trading in financial markets. Essentially, these computer programs feed in buy or sell orders to the exchanges based on predefined parameters. 

These platforms are necessary for people looking to use automated trading systems, as there needs to be a way for such systems to gain access to a market. Automated trading platforms enable this access by bridging the gap between the system and the platform. Their speed and efficiency can help execute repetitive tasks quickly, reducing the need for human intervention.

How do automated trading platforms work?

Automated trading platforms are typically cloud-based digital consumer platforms or trading software that act as intermediaries for users to access specific markets. A typical platform has the infrastructure necessary to run either local or cloud-based automated trading systems and the algorithms they rely on. Users typically pay a service fee for using a specific automated trading platform.

Types of automated trading platforms

You can choose from a few different types of automated trading platforms. A typical platform specializes in providing users access to specific financial markets, but the markets a platform allows access to vary. Other automated trading platforms offer access to pre-programmed trading bots for users who want to avoid creating or using their own automated trading systems. Many platforms also provide data visualization, backtesting, and additional tools to help traders test, fine-tune, and analyze their performance.

Let’s look at a few common types in greater detail:

Algorithmic trading platforms

Algorithmic trading platforms focus on executing trades based on predefined algorithms and strategies. Traders can create custom algorithms or use existing ones to automate trading decisions. These platforms are popular among quantitative traders and institutional investors because of their flexibility and ability to handle complex strategies.

Copy trading platforms

Copy trading platforms allow users to mimic the trades of experienced traders. Investors can choose a trader to follow and automatically replicate their trades in real time. This type of platform is suitable for those looking to benefit from the expertise of others without actively managing their portfolios.

Social trading platforms

Social trading platforms combine the elements of social networking and trading. Traders can interact, share insights, and follow each other's trading activities. It's a collaborative approach to trading that encourages knowledge-sharing and community engagement.

Robo-advisors

Robo-advisors are automated investment platforms that use algorithms to build and manage diversified portfolios based on investors' risk tolerance and financial goals. They offer a hands-off approach to investing, making them suitable for passive investors.

High-frequency trading (HFT) platforms

HFT platforms help traders looking to capitalize on short-term price fluctuations. These platforms execute numerous trades within fractions of a second, often relying on advanced algorithms and co-location services near exchanges.

Quantitative trading platforms

Quantitative trading platforms emphasize data-driven trading strategies. Traders use mathematical models, statistical analysis, and historical data to make informed trading decisions. These platforms are popular among quants and data-driven traders.

Forex trading platforms

Foreign exchange (forex) trading platforms specialize in currency trading, allowing traders to buy and sell currency pairs. These platforms often offer advanced charting tools and technical analysis features tailored to currency markets.

Popular automated trading platforms 

Dozens of automated trading platforms are available for those interested in using computerized strategies. Here are 12 of the most popular:

Composer  

Composer is unique among automated trading platforms because it has much more to offer interested investors than just automation. One of the most significant advantages is its no-code solution for all types of trading. Instead of creating an automated trading system from scratch, which involves learning how to program the complex algorithms that drive those automated systems, users can rely on Composer's integrated tools instead to build trading algorithms. 

In fact, Composer also offers various resources for beginners to learn the tricks of the trade and get started. 

(All set to explore algo trading with Composer? Sign up for a free 14-day trial today.)

QuantConnect

QuantConnect is a highly flexible platform for automation traders—especially those with the expertise to program their own algorithms. The platform has a large user community to interact with, and users are eager to share their knowledge. 

Users looking to monetize their automated trading systems can check out QuantConnect’s  "black box" system, which helps them earn a fee when other traders use their systems.

Pionex 

Pionex is one of the first automated trading platforms for the cryptocurrency space and offers a few advantages for crypto traders. It facilitates trading more than 120 cryptocurrencies and charges less trading fees than other platforms. Its well-developed mobile app also provides high flexibility when users step away from their computers. 

The platform offers 16 cloud-based trading bots for those who want to get started immediately instead of creating an automated system from scratch.

Zen Trading Strategies

This is an excellent platform for anyone new to automated trading. Its extensive and comprehensive tutorial program and four prebuilt automated trading strategies make it an attractive choice. 

The platform offers a trading consulting service and unlimited backtesting for more seasoned automated traders, allowing them to tweak their strategies.

Coinrule 

Coinrule offers a customizable trading bot for cryptocurrency markets, making it a solid choice for beginners and experienced automated traders. It has an intuitive and sophisticated user interface and a demo exchange (which helps test the latest automated systems). It also allows users to find answers to many common questions on the platform's existing user base. 

TradeStation 

TradeStation is often a favorite of active and advanced traders––thanks to its extensive tools and features. It offers comprehensive search functions, an active community, and commission-free stock, options, and exchange-traded fund (ETF) trades. The platform also facilitates crypto trading. 

With a $0 minimum balance policy, TradeStation supports new traders, reducing barriers to entry.

TradingView 

TradingView is one of the most powerful stock trading analysis software platforms that offers great tools for screening stocks and gaining access to technical analysis. It has dozens of research tools and chart options like a paper trading simulator, heat maps, fundamental data visualization, and several available trading indicators. The free version offers many functions, with a subscription-based option offering even more professional-level tools and services. 

The platform isn’t a registered brokerage, so to actually execute trades, users integrate their charts with a traditional brokerage service. 

CryptoHawk 

CryptoHawk is another crypto trading platform that leans hard into trading automation through its proprietary machine learning (ML) algorithm. The platform analyzes large data volumes to generate price predictions, spot patterns, and automate decision-making. 

It offers a free trial with iOS and Android app connectivity.

Trade Ideas

Trade Ideas enables AI-powered trading alerts and strategies. It provides real-time market scanning, portfolio tracking, and backtesting, allowing traders to evaluate mean reversion in assets. 

With a focus on technical analysis, Trade Ideas helps traders identify potential trading opportunities and manage risk effectively.

TrendSpider

TrendSpider is a technical analysis platform that uses automation to simplify chart analysis. Its advanced tools include automated trendline drawing, pattern recognition, and dynamic alerts. The platform empowers traders to make data-driven decisions and identify trends efficiently.

Interactive Brokers

Interactive Brokers is a well-established brokerage that offers an automated trading platform, supporting customizable algorithms and risk management features. It provides access to various markets and asset classes, making it suitable for traders interested in algorithmic strategies.

Black Box Stocks

Black Box Stocks specializes in providing traders with real-time alerts and trading strategies. It offers a unique approach to trading by integrating social sentiment analysis and unusual options activity. Traders can access a vibrant community and leverage automated alerts for informed decision-making.

How to choose an automated trading platform

While "the best" trading platform may be available, it may still not be the right fit for you. That’s why assessing all options is important before jumping in. Here are six main qualities you can use to evaluate whether an automated trading platform has what you need:

1. Market access

Every platform will offer access to at least a handful of markets, but you'll need to select one that grants you access to the markets you're interested in trading on. Platforms that offer a wider range of markets are generally considered better, although this isn't always the case.

2. Backtesting support

Whether using a platform that offers predefined trading strategies or bringing your own, a platform that offers backtesting support is often extremely useful. This lets you test your chosen strategy on historical data before letting it loose on a live market.

3. Algorithm support

Automated trading systems run on complex computer algorithms in specific programming languages like Python and C#. If you want to create your own automated system from scratch, select a platform that supports the languages your system's algorithms are written in.

4. Cost

Trading platforms usually charge fees in some form for access. These costs can add up over longer periods. Consider selecting a platform that charges manageable fees, whether they be subscription-based, fees per transaction, or in the form of minimum balance requirements.

5. Customer support

Understanding how to use an automated trading platform can be a challenge, especially if the platform offers a large number of customization options. Accessing a robust customer support option helps ensure you handle the platform’s steep learning curve.

6. Regulatory framework

It’s important to understand the regulatory framework governing the automated trading platform. In the event of the company's failure or dissolution, comprehending the potential risks to your invested funds is essential.

FAQs

Can you make a profit with automated trading?

Yes. Automated trading platforms execute trades based on predefined rules, trading signals, and strategies, allowing traders to take advantage of market opportunities, even when they can't monitor the markets 24/7. However, profitability depends on the effectiveness of the trading strategy, risk management, and market conditions.

Is automated trading illegal?

No, it’s not. However, traders must ensure their strategies comply with relevant financial regulations and exchange rules. For example, insider trading and market manipulation are illegal activities, whether done manually or through automation.

Can AI replace trading?

AI can enhance trading by analyzing vast amounts of data and identifying patterns. While AI-powered algorithms can automate trading decisions, they often work best when combined with human oversight. AI can significantly improve trading efficiency and decision-making, but it's unlikely to entirely replace human traders, especially in complex and rapidly changing markets.

Build your investment strategies with Composer

Automated trading is complex and may seem daunting, but with the right platform and tools, it’s seamless. Speaking of the right trading platform, Composer has you covered. Our no-code visual editor lets you make more informed trading decisions simpler. Head to composer.trade, and sign up for a free 14-day trial today.