4 Popular Free Stock Trading Bots to Consider

With algorithmic trading, Wall Street legend Jim Simons generated 66% returns annually for more than 30 years. Today’s advances in artificial intelligence, machine learning, and automated trading can help retail investors use similar tools to the ones employed by algorithmic trading greats like Simons. Today’s trading software makes creating a stock trading bot easier than ever, meaning there’s never been a better time to try algorithmic trading. 

We’ll explore trading bots and discover four of the best trading bots on the market. Then, we’ll demonstrate how you can make a stock trading bot with Composer, showing you where you can find Composer’s algo trading strategy database, how to filter trading strategies, and the importance of backtesting. We’ll also discuss how you can use AI stock trading and ChatGPT when editing these strategies.

What is a trading bot?

A trading bot is a computer program that executes buy and sell orders automatically based on a trading algorithm. Trading bots use coding languages such as Python, C++, and Java to create trading strategies. Although trading bots run on various languages, platforms, and mathematical frameworks, they all make decisions using predefined algorithms and rules that remove the need for manual order entry. 

Trading bots typically focus on a single financial market. Although some traders specialize in making crypto trading bots, others prioritize trading exchange-traded funds (ETFs), stocks, or forex. Whether you use a forex or crypto bot, automating your trading with a bot can improve your performance, reduce risk, and save you time. 

Trading bot benefits

Algo traders use trading bots for various reasons. Primary trading bot benefits include the following:

• Reduced risk: Trading bots designed with risk-parity strategies in mind don’t buckle under pressure, make errors, or allow emotions to influence their trading.

• Technical analysis: Trading bots can identify patterns and solve statistical operations quickly and accurately, making them ideal for strategies that leverage technical analysis. 

• Market timing: Seconds separate a winning trade from a losing one. Trading bots can capitalize on winning trades faster than humans, meaning they excel at timing the market.

• Time-saving: When you use a trading bot, you eliminate the need for manual order entry, saving you precious time you can spend on other tasks. 

Types of trading bots

Trading bots vary depending on their function. Some focus on day trading strategies, while others concentrate on arbitrage or dollar cost averaging. Here are some popular day trading bot types:

• Market maker bots: Market maker bots maintain asset values by filing buy and sell orders for traders. These bots can also influence prices by executing large-volume trades.

• Scalper bots: Also known as scalping bots, these bots trade extremely quickly, generating buy and sell orders much faster than any human. These bots aim for tiny profits spread across numerous trades by executing trades rapidly. 

• Arbitrage bots: Arbitrage bots generate returns by exploiting price differences between exchanges. AI stock bots using an arbitrage strategy will evaluate an asset’s price across multiple exchanges simultaneously, buying cheap and selling high. 

4 popular free stock trading bots

The right stock trading bot depends on the financial market. For example, if you trade crypto, you’ll likely want to focus on a crypto bot like Coinrule, 3Commas, or Cryptohopper. Alternatively, you could choose an all-in-one platform like TrendSpider. 

The following list features four of the market’s most popular free stock trading bots. These systemic investing platforms offer free, basic memberships suitable for beginners who want to try algo trading before they fully commit. 

Composer

Composer makes algorithmic trading easy. Opening a Composer trading account requires no credit or bank connection. You can access unlimited backtesting, Symphony data and insights, and Composer’s no-code strategy builder with your free account. By letting you track performance before investing, Composer prepares you for algo trading without subjecting you to risk. You can acquire algo trading experience in a safe, controlled environment. 

Best of all, anyone can use Composer. It’s a no-code strategy builder, meaning you can start using the platform without writing a single line of code. Composer also offers numerous other features, such as a ChatGPT-4-powered AI assistant, integrations with charting software TradingView, and a catalog of professional and user-created strategies you can use and adapt as you see fit. 

Superalgos

Superalgos is an open-source, community-owned crypto trading software. As a decentralized, crowdsourced trading platform for retail crypto traders, Superalgos focuses on empowering its user base and facilitating idea sharing. It accomplishes this by offering native tokens to users who share their work with Superalgos. 

Superalgos users can design, test, and execute crypto trading bots on its platform for free. By standardizing its intelligence assets, Superalgoes makes it easy to share strategies, AI models, workspaces, and data. The more content you share, the more native tokens you can earn. 

Tickeron

Tickeron is an investment platform powered by sophisticated AI tools. Its offerings include an AI scanner, trend prediction and pattern search engine, backtesting, and automated portfolio trading. Tickeron offers crypto, mutual funds, and forex trading, along with stocks and ETFs.

Although many Tickeron features require a paid subscription, you can access several services for free, such as its AI-powered stock screener, portfolio wizard organizer, and trade alerts. Best of all, Tickeron offers free trading education and access to its community network, where users can share advice, tips, and tricks. 

Trade Ideas

Trade Ideas markets itself as a powerful stock screener that can help you find ideal assets that meet your criteria. It offers AI-powered entry and exit signals, customizable alerts, simulated trading, advanced charting capabilities, and real-time market scanning.

Trade Ideas provides a stripped-down free version for users who want to test its platform. Although it lacks premium features like paper trading and real-time data, you can still access pre-built custom layouts, scans, and screeners. 

How to use Composer’s platform: A step-by-step guide

Once you choose your desired platform, you can start developing your own stock trading bot. Here, we’ll show you how to build, backtest, and invest with Composer in just a few steps. You’ll discover how to make a trading bot using Composer. 

1. Head to Composer’s “Discover” section

First, sign up for a free trading account with Composer. Once you’ve signed up, navigate to the “Discover” page. Then, head to the “Community” section.

Note: Composer offers stocks and ETF trading (no cryptocurrencies like Bitcoin at this time).

2. Search and filter for a strategy that suits your needs

Composer can help you develop an approach based on a particular stock, asset class, or strategy. You can also build strategies based on technical indicators, such as the Sharpe Ratio or Max Drawdown. Search and filter results to find the perfect strategy in minutes.

Here, we’ll filter for the last edited date before Jan. 1, 2023, to see if we can find a strategy with strong out-of-sample performance during the year. We’ll also filter for annualized returns of less than 25% to prevent finding strategies that overfit our design, which may prove risky.

After applying these filters, the “Recession Tester” strategy jumps out. This strategy works by comparing the 20-day cumulative return of LQD against the 20-day cumulative return of BIL. If the 20-day cumulative return of corporate bonds (LQD) is greater than short-term treasury bonds (BIL), invest in SPY; otherwise, stay in BIL.

BIL is an ETF that tracks short-term Treasury bills, which are considered low-risk, low-return investments. If the cumulative return of corporate bonds (which typically carry more risk but also more return than Treasury bills) is higher than BIL’s return, this suggests a risk-on sentiment in the market where investors are willing to take on more risk for higher returns.

In such a risk-on environment, investing in equities like SPY can be beneficial; they generally offer higher potential returns than bonds in exchange for higher risk. As investors, we may expect higher economic growth and favorable market conditions in a risk-on environment, which typically favors stocks in the SPY index.

3. Amend the strategy using AI and the no-code editor

From the strategy factsheet, click or tap “Edit.” This takes you to the no-code visual editor so you can easily understand your strategy’s logic and make changes.

In this example, we want to reduce the max drawdown of the strategy. First, select the “Create with AI” feature and ask, “Can you reduce the max drawdown of this strategy?” The ChatGPT-4-powered AI assistant can understand myriad trading use cases, making it ideal for developing a strategy or modifying an existing one based on a target outcome. 

The AI assistant responds with a trading strategy that makes a decision based on the max drawdown of SPY. If the 10-day max drawdown of SPY is greater than 5%, stay in BIL. Otherwise, the strategy remains the same.

Note: The AI assistant may select arbitrary figures such as 10 days and 5%, so examine the logic and tweak based on your trading knowledge.

4. Backtest and invest in a click

You don’t need to know any coding languages (e.g., Python) to invest directly in or backtest the trading strategies you create. Composer creates a specific brokerage account in the background, so you needn’t worry about your automated trading interfering with your manual trading. Once you select “Invest,” Composer will automatically trade for you based on your predefined logic.

Hopefully, we’ve sparked your curiosity about creating your own stock trading bot. If you get stuck, refer to our community strategy database or ask for help from the AI trading assistant.

In the automated stock trading world, you must leverage algorithmic trading knowledge to enhance your trading ideas. Composer’s free trading strategies database provides a valuable resource for traders looking to develop their own stock trading bots. By tapping into this community-driven platform, you can gain insights from other traders and supercharge your trading strategies. Whether you’re a beginner or an experienced trader, this database can provide you with new ideas and approaches to trading in the stock market.

Sign up for Composer and discover how algorithmic trading can revolutionize your investing.