Traders are offered many automated trading solutions, from robots and plug-in algos to copy trading.
Much of it is either a scam or unworkable, so it has a bad reputation. This is undeserved, as there is no reason why automated trading cannot be useful and profitable if done right. Read on to learn more about the best solutions for automated trading, how automated trading works, and how to choose the best automated trading broker for you.
- AvaTrade, Highly regulated, choice of fixed or floating spreads.
- Pepperstone, Great ECN execution on MT4/5, cTader, TradingView and Pepperstone proprietary platform.
- FXTM, Best all-around broker with high floating leverage and fast execution.
- FP Markets, ECN trading with leverage up to 1:500.
- Eightcap, Competitive pricing + excellent daily videos.
- BlackBull Markets, Best ECN trading environment, with scalping and hedging.
Best Automated Brokers Comparison
| | | | | |
Regulators | ASIC, BVI, Central Bank of Ireland, FFAJ, FSCA, KNF, MiFID | ASIC, BaFin, CMA, CySEC, DFSA, FCA, SCB | CMA, FCA, FSC Mauritius, FSCA | ASIC, CMA, CySEC, FSCA | ASIC, CySEC, FCA, SCB |
Year Established | 2006 | 2010 | 2011 | 2005 | 2009 |
Execution Type(s) | Market Maker | No Dealing Desk, NDD | ECN/STP, Market Maker | ECN/STP | ECN/STP, Market Maker |
Minimum Deposit | |||||
Average Trading Cost EUR/USD | 0.9 pips | 1.1 pips | 0.1 pips | 1.2 pips | 1.0 pips |
Average Trading Cost GBP/USD | 1.5 pips | 1.4 pips | 0.2 pips | 1.4 pips | 1.2 pips |
Average Trading Cost Gold | $0.29 | $0.15 | $0.18 | $0.16 | $0.12 |
Trading Platform(s) | Other, MetaTrader 4, MetaTrader 5, Proprietary platform, Web-based+ | Other, MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Trading View+ | MetaTrader 4, MetaTrader 5, Proprietary platform | MetaTrader 4, MetaTrader 5, cTrader, Proprietary platform, Web-based | MetaTrader 4, MetaTrader 5, Trading View |
Islamic Account | |||||
Negative Balance Protection | N/A | N/A | |||
| Visit Website | Get Started Visit Website75-95% of traders on margin lose | Visit Website | Visit Website | Visit Website |
AvaTrade
In Summary Highly regulated, choice of fixed or floating spreadsAvaTrade remains one of the most competitive automated Forex brokers, allowing clients to deploy any Forex trading robot operating on the MT4 and MT5 trading platforms. It also supports social trading via DupliTrade, ZuluTrade, and MQL5 Signal Service. Completing the broad choices of trading platforms are the proprietary WebTrader, AvaOptions and AvaTradeGO. The choice of fixed and floating spreads and a commission-free asset selection above 1,250 attracted over 300,000 clients to this Irish-based broker. Operational since 2006, this well-regulated market maker has excellent technology infrastructure and became one of the most transparent and trusted online multi-asset brokers with a balanced product and services portfolio ideal for all retail traders.
Pros & Cons
- High quality educational offering via AvaAcademy
- Excellent choice of trading platforms catering to various trading needs
- Broad asset selection and cross-asset diversification opportunities
- Well-regulated and trusted broker with oversight from a central bank
- Trading costs competitive but nothing special
Pepperstone
In Summary Great ECN execution on MT4/5, cTader, TradingView and Pepperstone proprietary platformPepperstone connects traders to deep liquidity pools and has NDD order execution with ultra-fast average order execution speeds of 30 milliseconds. The commission-based trading account features raw spreads from 0.0 pips for a commission of $7.00 per 1.0 standard round lot, and high-volume traders can lower final trading fees via a volume-based rebate program. It makes Pepperstone one of the best Forex brokers offering automated trading.
The well-balanced asset selection of 1,500+ assets includes Forex, CFDs on Forex indices, cryptocurrencies, and ETFs.
Pros & Cons
- Excellent choice of trading platforms consisting of MT4/MT5, cTrader, TreadingView and Pepperstone Platform
- Market-leading MT4/MT5 upgrade package, Autochartist, and API trading
- Social trading support via Signal Start, MetaTrader Signals, Copy Trading by Pepperstone, DupliTrade
- Leverage of up to 1:400 depends on jurisdiction and superb trade execution
- Demo accounts have 60-day time limits
FXTM
In Summary Best all-around broker with high floating leverage and fast executionWe have made FXTM one of our top-rated automated trading Forex brokers because in addition to its lengthy track record, it enjoys a very high level of regulatory oversight. In addition, it has a sterling reputation, and it offers a highly competitive fee structure which tends to keep down the cost of trading.
Traders get the core MT4/MT5 trading platforms, with full support for algorithmic and copy trading, while FXTM also features its proprietary mobile application, FXTM Trader. With 1,000+ assets, direct share investments, and in-house constructed thematic stock baskets, FXTM maintains a balanced asset selection, supplemented by quality education, research, and trading signals.
Pros & Cons
- Excellent commission-based Forex pricing environment and transparency
- Upgraded MT4/MT5 trading platforms plus proprietary mobile trading app
- Quality market research and educational content for beginner traders
- A highly regulated broker with a tier-1 license
- Limited choice of commodities
FP Markets
In Summary ECN trading with leverage up to 1:500FP Markets is an ASIC-regulated Australian automated trading Forex broker, which launched in 2005. For most traders, the unique selling point of this broker is in the extremely wide range of tradable assets offered, providing the opportunity to trade over ten thousand individual stocks and shares including publicly quoted Hong Kong and Australian companies. FP Markets also offers 60 Forex pairs and crosses, 11 equity indices, the major commodities, and 5 cryptocurrencies including Bitcoin. FP Markets offers an unusual hybrid ECN/STP execution model, meaning their clients can choose between ECN style of execution giving a very high level of speed, and a “straight through processing” execution style which allows for more “natural” spreads.
Pros & Cons
- Choice of trading platforms and auxiliary trading tools
- Very competitive cost structure and excellent asset selection
- Low minimum deposit requirement and leverage of up to 1:500
- Well-regulated and trustworthy
- Availability of Iress geographically restricted
Eightcap
In Summary Competitive pricing + excellent daily videosAlgorithmic traders require an innovative infrastructure, excellent trade execution, deep liquidity, and low trading fees, which Eightcap provides. Forex traders can rely on the MT4 trading platform, which remains the primary choice with thousands of EAs, try its successor MT5, which requires re-coding MT4 solutions or take advantage of Capitalise AI, where traders can automate Forex strategies in a code-free environment.
Algorithmic Forex traders who require low latency 24/5 market access can qualify for free VPS hosting if they trade a minimum of five standard lots monthly. It is a generous offer with conditions most automated Forex traders easily exceed.
Pros & Cons
- Low minimum deposit and high leverage of up to 1:500
- Competitive cost structure
- Excellent technology infrastructure and seasoned management team
- Daily research and quality educational content
- Limited leverage in some areas
BlackBull Markets
In Summary Best ECN trading environment, with scalping and hedgingBlackBull Markets was founded in 2014 in New Zealand. Like many antipodean automated trading Forex brokers, BlackBull Markets is an ECN broker, offering raw spreads and commissions. They are regulated in New Zealand by the Financial Services Providers Register (FSPR) and offer a maximum leverage on some Forex currency pairs as high as 500 to 1. In addition to their global headquarters in New Zealand, BlackBull Markets also has presences in the form of branch offices in New York and Malaysia. BlackBull Markets offers a relatively tight range of tradable assets: 27 Forex currency pairs and crosses, gold, silver, crude oil, natural gas, and 6 major equity indices. That should be sufficient for those traders with more focused strategies not requiring wide diversification.
Pros & Cons
- ECN/NDD execution model with deep liquidity
- Institution-grade pricing for retail traders via proprietary price aggregation
- ZuluTrade and Myfxbook for social trading
- Leverage of up to 1:500
- Limited deposit options
Asset List and Leverage Comaprison
Currency Pairs | Yes | Yes | Yes | Yes | Yes |
CryptocurrencyPairs | No | Yes | Yes | Yes | Yes |
CommoditiesAnd Metals | Yes | Yes | Yes | Yes | Yes |
Index CFDs | Yes | Yes | Yes | Yes | Yes |
Equity CFDs | Yes | Yes | Yes | Yes | Yes |
Bonds | No | Yes | Yes | No | No |
ETFs | No | Yes | Yes | No | No |
Options andSynthetics | Yes | No | Yes | No | No |
MaximumRetail Leverage | 1:2000 | 1:500 | 1:400 | 1:500 | 1:500 |
MaximumPro Leverage | 1:2000 | 1:500 | 1:400 | 1:500 | 1:500 |
Overview of Automated Forex Trading Software
MT4 | Yes | Yes | Yes | Yes | Yes |
MT5 | Yes | Yes | Yes | Yes | Yes |
cTrader | No | No | No | No | No |
ProprietaryPlatform | No | Yes | Yes | No | No |
AutomatedTrading | Yes | Yes | Yes | Yes | Yes |
Social Trading | No | Yes | Yes | Yes | Yes |
MT4/MT5Add-Ons | No | Yes | Yes | Yes | Yes |
GuaranteedStop Loss | No | No | No | No | No |
Negative BalanceProtection | Yes | Yes | Yes | Yes | Yes |
UniqueFeature One | Low trading costs | MAM/PAMM Accounts | ExcellentEducation | Cutting-edgeTrading Tools | VPS Hosting |
UniqueFeature Two | Trading Signals | VPS Hosting | Quality Trading Tools | MAMAccounts | API Trading |
Automated Forex Trading Explained
Trading Forex manually can be exhausting and repetitive, involving analyzing charts, reading economic reports, monitoring price action, and identifying buying and selling opportunities. After placing a trade, emotional decision making displaces the best trading plan for most traders, and the long-term outcome is a loss. Between 70% and 85% of retail traders manage losing portfolios. Automated Forex trading can provide a solution.
100% automated Forex trading robots or expert advisors (EAs), as they are named on the MT4 trading platform are increasingly popular, but they neither guarantee profits nor present a one-stop solution to long-term profitability. The superior ones are expensive or remain inaccessible to the public. However, trading with one of the best automated Forex brokers adds to the long-term profitability of any automated trading strategy, and we have identified some excellent choices.
Given its popularity, there is plenty of misleading information about Forex trading robots and EAs. Current retail solutions remain simplistic and without advanced ML/AI at the core.
One of the most commonly-deployed strategies is a moving average crossover. For example, the EA will buy an asset when a fast-moving average crosses above a slow-moving average and sell when it crosses below it.
Does Automated Trading Work? Is it Profitable?
Automated trading can work just like manual human trading. It depends on whether the algorithm used to direct the auto trader bot’s trades works in the market conditions in which the asset(s) it trades is in. There are indeed algorithms based on trend following and mean reversion that are usually profitable over the long term because these are both properties of speculative markets that can be exploited. So, human discretion in trade entries and exits is not necessary for profitable trading.
So many people believe that automated trading does not work because the industry has grown to sell automated trading robots and other trading apps. Almost all these robots promise very large, fast profits, which means it should be no surprise to anyone that almost every time, they will soon start to perform disastrously and burn through your entire trading account if you let it. This industry of scammers has given automated trading a bad name.
How Do I Start Automated Trading?
- Choose a Trading Platform: Select your preferred trading platform, such as MetaTrader 4 or MetaTrader 5, which supports robots.
- Buy or Program an Algorithmic Strategy: You can buy a robot, there are many for sale, or build your own by learning to program or getting a programmer to build one with your strategy.
- Test the Strategy: Backtest the strategy against real price data over a long period (ideally many years) representing a very wide range of market conditions. Generate performance metrics and review them. Some optimisation might be a good idea, but be careful not to over-optimise it. A good rule of thumb is to test it against an unknown five-year period of data when you have determined it was profitable over the previous 5 years. If the out-of-sample backtest is also profitable, that is a sign that you might have an effective trading strategy.
- Open a Trading Account: Choose a broker that supports your preferred automated trading platform, has good regulation, and offers competitive fees that suit your strategy. Remember that trading fees can strongly impact performance.
- Execute and Monitor: Connect your robot to a live (real money) trading account and monitor its performance. If there is a period where the performance strongly outlies your long-term backtest data, something has gone wrong. If possible, test it first on a demo account.
There are alternative ways of automated trading without buying or developing a trading robot, such as copy trading, where you allocate part of your account to copy the trades of a signal provider. Even though their trading might be manual and discretionary, to you, it is automated trading.
Which are the Most Popular Platforms and Features for Auto Trading?
- MetaTrader 4 – widely used and very popular. Runs trading robots called Expert Advisors (EAs) against demo and live (real money) accounts. It also has a back-testing capability. Uses language called MetaQuotes.
- MetaTrader 5 – very similar to MetaTrader 4, but less popular. Compatible with Python.
- NinjaTrader is popular with futures and stock traders—customisable algorithms using NinjaScript (C#).
- Trade Station - EasyLanguage programming for custom strategies.
- Interactive Brokers (IBKR) - API access for algorithmic trading.
How to Choose the Best Broker for Automated Trading?
Consider these eleven factors when building a shortlist of brokers for automated trading, and when comparing them to pick the best one.
- Accepting Clients in Your Country of Residence?
- Offers Compatible Platform
- Well-Regulated and Secure
- Competitive Trading Fees: Focus on overnight swap fees for long-term strategies and spreads/commissions for strategies that trade frequently and hold for short periods.
- Execution Speed / Reliability
- Risk Management Tools?
- Back Testing and Strategy Optimisation Tools
- Affordable Minimum Deposit
- Appropriate Account Type?
- Offers Appropriate Selection of Assets for Trading
- Offers Demo Account?
How to Choose an Automated Trading Program
Suppose you are looking at a trading robot's historical performance. In that case, you should see periods of losses and variance in the monthly returns because this is what profitable trading looks like in real life. If these elements are not there, it is a scam.
You might be shown a record of monthly returns that looks realistically profitable, but is it verified? Can you prove that the live returns or backtest are accurate? It is impossible to verify them yourself without access to the algorithm, but if you had it, you could run it through historical price data and get your own idea of its performance.
When you are satisfied that it is really an algorithm that can be profitable and that its claims are true, you should then ask whether it is the kind of algorithm you want to trade, something you can believe in. It gets hard because automated trading programs are "black boxes"- the owner will not reveal the Forex trading algo to you because it is their property. However, the seller should at least be able to tell you how the algorithm works, whether it is based on trend following, momentum, support or resistance, etc.
Before paying for your choice, you should believe in the concept and that it has been profitable and has a good chance of continuing to be profitable.
The Cost of Forex Auto Trading
Here is a breakdown of monthly costs algorithmic Forex traders face:
- Algorithmic trading platform - Free, as brokers provide it at no additional cost.
- API - Usually free, but it may have a minimum deposit requirement and monthly trading volume.
- VPS hosting is often free of charge at Forex brokers, but it requires a minimum deposit and monthly trading volume.
- High-speed internet connection: Between $20 and $150 monthly, depending on geographic location and internet service provider.
The two main one-time fees for algorithmic Forex traders are:
- Developing a Forex trading strategy - The costs depend on the time it takes to develop and test a strategy and the associated trading losses in a live account, which can exceed thousands of dollars.
- Coding the strategy—It depends on the complexity of the algorithm but might cost between a few hundred and tens of thousands of dollars (high-end models can cost millions, but prices are coming down as AI-based models become more affordable).
Pros & Cons of Automated Trading
Let’s weigh the common ups and downs that most automated traders face.
Pros of Automated Trading
- No emotional decision-making.
- Severe reduction in the negative impacts of trading psychology.
- Ability to receive 24/7 market coverage, which remains asset-dependent.
- In-depth cross-asset diversification.
- Little human time is required in front of the trading screen.
- Elimination of repetitive technical analyses.
- Less stress.
- Improved trading speed and advanced order placement.
Cons of Automated Trading
- Retail robots will usually struggle to perform consistently.
- Robots tend to fail during fundamental or sentimental changes in the market.’
- The best robots are too expensive for many retail traders.
- A big majority of trading robots for sale are useless or deliberate scams.
Forex Robot Scams
Unfortunately, the automated trading world is full of Forex robot scams. Don’t fall for them – use your common sense and ask how any algorithm could produce a huge profit every month. Scammers will present screenshots of fake accounts displaying enormous profits. Nobody would sell automated trading solutions that generate those profits. Traders should ask themselves why a Forex robot or EA is available free of charge or even for a few hundred dollars if it makes developers massive returns. The answer is obvious. Scammers prey on the fact that up to 85% of retail traders lose money, and the desire to make money without effort or drawdowns. Using automated trading solutions properly is one thing, but expecting guaranteed profits at a consistently high level is asking to be scammed. It is important to be realistic.
The Best Times for Automated Trading
- Periods when there are no scheduled high-impact economic data releases, central bank conferences, meetings, speeches, or other market-moving events.
- Periods of high liquidity, like the first and last hour of the Tokyo, London, and New York trading sessions. The highest liquidity, especially in Forex, is found during the overlap of the New York and London sessions.
Leverage & Automated Trading
Leverage can magnify both profits and losses. Deploying an untested automated trading solution in a high-leverage account without constant supervision can expose you to potentially disastrous losses. After testing it in a demo account and performing extensive backtests, you should start it on a live account with low leverage and low capital for testing in real market conditions.
You can increase leverage and capital after you gather enough data over time to trust the robot. I recommend traders monitor their account performance and deploy stringent risk management rules during the initial set-up of any automated trading solution.
