Algorithmic trading has really taken off in the past couple of years, allowing investors to benefit from automated strategies when trading stocks, futures and options, CFDs, cryptocurrencies, and other financial instruments. However, with the massive number of algorithmic trading platforms available today, it can be challenging to decide which might be the best for you.
In this article, we are going to examine the best algorithmic trading platforms, review their key features and pricing plans, and compare them head to head.
Here is the list of the best algorithmic trading platforms in 2023:
- Interactive Brokers – The best algorithmic trading platform overall
- TradeStation – An algorithm trading system with a proprietary programming language
- QuantConnect – Powerful algorithmic trading software
- OANDA – Automated trading algorithm with no minimum deposit
- Cryptohopper – A feature-rich crypto trading platform
- AvaTrade – A variety of automated trading software tools
- MetaTrader 5 – A popular trading platform for forex and exchange markets
- Coinrule – A streamlined platform for crypto algorithmic trading
The 8 best algorithmic trading platforms: Examining top automated trading options for 2023
In the sections that follow, we are going to review the best algorithmic trading platforms available in the market today based on key features, trading fees, pricing plans, and other criteria. Do note that the ranking is ultimately subjective and that it doesn’t mean that one platform is necessarily better than the other.
1. Interactive Brokers – The best algorithmic trading platform overall
Interactive Brokers is one of the leading online trading platforms, allowing users to tap into stocks, ETFs, CFDs, options, bonds, commodities, and other markets. The platform allows users to use a number of different algo orders, which can make trading more efficient and simple. Users can use the adaptive algo, close price, TWAP, and more than a dozen other algorithms.
To make the journey into algorithmic trading more accessible for beginners, Interactive Brokers offers in-depth descriptions of each algorithm and a video overview of its main benefits and disadvantages. It is worth noting that Interactive Brokers is not only widely considered as one of the best brokers for algorithmic trading, but also one of the top CFD trading platforms.
Key features:
- The Interactive Brokers ScaleTrader algorithm can be used for stocks, options, ETFs, bonds, futures, forex, and other products. other than mutual funds
- In addition to advanced trading orders, Interactive Brokers offers 13 algorithmic trading orders in total
- Third-party algos like Dark Sweep and Fox Alpha are supported as well
- Offers to global markets, including stocks, ETFs, CFDs, options, bonds, commodities, and others
- Interactive Brokers' Trader Workstation platform is a bit complex for beginners, but it is highly customizable and offers a wide range of features for experienced traders
| Founded | 1978 |
|---|---|
| Trading Fees | $0.0005 to $0.005 per share, depending on the commission structure |
| Pricing Plans | IBKR Lite (for retail investors), IBKR Pro (lower commission) |
| Minimum Deposit | $0 |
2. TradeStation – An algorithm trading system with a proprietary programming language
TradeStation is a well-known and widely-used algorithmic trading platform that provides traders and investors with a range of tools and features to develop, test, and execute automated trading strategies. The platform is widely regarded as one of the best commodity trading platforms thanks to its wide range of available trading tools and financial instruments.
TradeStation is known for its powerful backtesting and strategy development capabilities. It is generally more expensive than Interactive Brokers, which is featured first on our list, but it also offers a wider range of features and tools, especially for those dealing with high-frequency trading.
Key features:
- Uses EasyLanguage, a proprietary programming language that can be used to create trading indicators, strategies, and custom trading applications
- The platform offers access to extensive real-time market data, making algorithmic trading strategies more efficient
- Supports stocks, ETFs, CFDs, and other traditional financial instruments in addition to cryptocurrency trading
- RadarScreen is TradeStation’s native opportunity scanner, allowing traders to scan financial markets for market conditions based on predetermined parameters
| Founded | 1982 |
|---|---|
| Trading Fees | Starting at $0.60 per options contract, $0.50 per micro futures |
| Pricing Plans | No recurring fee |
| Minimum Deposit | $0 |
3. QuantConnect – Powerful algorithmic trading software
QuantConnect is an open-source, cloud-based algorithmic trading platform for equities, FX, futures, options, derivatives, and cryptocurrencies. It offers a variety of features and tools for developing, backtesting, and deploying algorithmic trading strategies.
QuantConnect is popular among both beginners and experienced algo traders. It is relatively easy to use, but it also offers a wide range of features and tools for experienced traders.
Key features:
- QuantConnect offers a free tier for backtesting, which is a great way to get started with algorithmic trading
- The platform is cloud-based, so you can access it from anywhere with an internet connection
- Supports a wide range of markets, including equities, FX, futures, options, derivatives, and cryptocurrencies
- A large and active community of users, which means that there is a lot of support available if you need help
| Founded | 2011 |
|---|---|
| Trading Fees | The base fee is $0.85/contract, and the exchange fee is $1.60/contract |
| Pricing Plans | Starting at $8/month |
| Minimum Deposit | $0 |
4. OANDA – Automated trading algorithm with no minimum deposit
OANDA is a popular online trading platform that offers a variety of features and tools for algorithmic trading. It is known for its user-friendly interface and its powerful backtesting capabilities. One of the key benefits of OANDA for algorithmic trading is its support for custom APIs. This allows you to develop your own algorithmic trading strategies and connect them to the OANDA platform. OANDA also offers a variety of pre-built algorithmic trading strategies that you can use or customize.
Another key benefit of OANDA for algorithmic trading is its VPS (virtual private server) hosting service. This allows you to run your algorithmic trading strategies 24/7/365 without having to worry about your computer being turned off or losing your internet connection.
Key features:
- Support for custom APIs, VPS hosting, advanced charting, technical indicators, and risk management tools
- A variety of advanced charting features can be used to develop and backtest algorithmic trading strategies
- Risk management tools that can be used to protect your account from losses
- Variety of educational tools and materials
| Founded | 1982 |
|---|---|
| Trading Fees | Margins from 5% |
| Pricing Plans | No recurring fee |
| Minimum Deposit | $0 |
5. Cryptohopper – A feature-rich crypto trading platform
Cryothopper is a powerful trading platform aimed at cryptocurrency users. It can be connected to virtually all of the top crypto exchanges, including Binance, KuCoin, Coinbase, Kraken, and others. Cryptohopper allows users to execute manual trading orders, or set up predetermined trading parameters wish are automatically executed once the conditions are met.
Cryptohopper’s crypto arbitrage scanner monitors the market conditions and can notify users about potentially lucrative market opportunities, like arbitrage opportunities that can arise between different markets. Users can test out their algorithmic trading strategies against historical data, which allows users to refine their strategies without risking real money.
Key features:
- Crypto exchange accounts can be managed through a unified trading terminal
- AI-powered trading bots
- Scan markets with up to 75 trading bots
- Copy trading and trading templates
- Dollar-cost averaging, market-making, short selling, and arbitrage options
| Founded | 2017 |
|---|---|
| Trading Fees | Starting from 0.1% per trade |
| Pricing Plans | Starting at $16.58/month |
| Minimum Deposit | $0 |
6. AvaTrade – A variety of automated trading software tools
AvaTrade is an online trading trading platform that focuses primarily on forex but supports other financial instruments, including commodities, stocks, ETFs, and even crypto assets. AvaTrade is a particularly good option for beginner traders thanks to a wide range of educational material, ranging from helpful videos to in-depth guides.
One of the key benefits of AvaTrade for algorithmic trading is its support for the MetaTrader 5 (MT5) trading platform. MT5 is a popular platform for algorithmic trading, and it offers a wide range of features and tools for developing, backtesting, and deploying algorithmic trading strategies.
Key features:
- Supports the MetaTrader 5 trading platform, which is a popular platform for algorithmic trading
- A variety of technical indicators that can be used to develop and backtest algorithmic trading strategies
- AvaTradeGO allows users to monitor social trends from the AvaTrade traders community
- Supports Duplitrade, an MT4 compatible platform, which allows traders to automatically follow more experienced traders’ signals and strategies in real time
| Founded | 2006 |
|---|---|
| Trading Fees | Overnight fee, inactivity fee ($50), administration fee ($100) |
| Pricing Plans | No recurring fee |
| Minimum Deposit | $100 |
7. MetaTrader 5 – A popular trading platform for forex and exchange markets
MetaTrader 5 (MT5) is a popular trading platform for forex, stocks, and other markets, which connects to other exchange platforms like AvaTrade and eToro. It is known for its user-friendly interface, its powerful backtesting capabilities, and its wide range of supported markets. MetaTrader allows users to create their own trading bots to leverage the power of algo trading. These robots can analyze quotes of financial instruments and execute orders on users’ behalf.
MetaTrader is known for Expert Advisors (EAs), which are automated trading programs that can be used to trade on behalf of the trader. MT5 supports a wide range of EAs that can be developed and backtested using the MQL5 programming language.
Key features:
- MetaTrader Market features hundreds of different algorithmic trading applications, which can be tested before purchasing or renting
- Bots and indicators can be downloaded for free from the MQL5 Code Base
- The MQL5 Freelance program allows users to task programmers with building custom trading bots
- Supports dozens of online trading platforms, including AvaTrade, IG, OANDA, Swissquote, and more
| Founded | 2000 (the year MetaTrader’s parent company MetaQuotes was established) |
|---|---|
| Trading Fees | Trading costs charged by your broker |
| Pricing Plans | No recurring fee |
| Minimum Deposit | $100 |
8. Coinrule – A streamlined platform for crypto algorithmic trading
Coinrule is another crypto-centric platform on our list, which allows users to automate trading decisions and benefit from the use of templates and other premade trading strategies. It supports all major digital exchanges, including Coinbase, Binance, Kraken, Crypto.com, and several others.
Coinrule boasts an easy-to-use interface, which makes it easy for beginners to take advantage of automated trading strategies. The strategies are based on simple "if this, then that" logic, where users can specify certain events or market conditions that trigger specific actions, such as buying, selling, or executing other trade orders. For an overview of other competing platforms, check the list of Coinrule alternatives.
Key features:
- Up to 10,000 executions per rule
- Up to 50 live trading rules
- Create rules based on popular indicators (RSI, SMA, etc.)
- Unlimited template trading strategies (limited to the “Pro” plan)
| Founded | 2019 |
|---|---|
| Trading Fees | Starting from 0.01% |
| Pricing Plans | $29.99/month |
| Minimum Deposit | $100 |
Algorithmic trading FAQs
What is algorithmic trading?
Algorithmic trading, also known as automated trading or black-box trading, is the use of computer programs to execute trades on behalf of traders. Algorithmic trading programs are based on pre-defined rules and instructions, which can be based on technical analysis, fundamental analysis, or a combination of both.
While algorithmic trading might sound a bit intimidating at first, it can be really simple in practice. Here are some examples of potential algorithmic trading strategies:
- Buy an asset when its price crosses above its moving average and sell the asset when its price crosses below its moving average.
- Sell 15 shares after the price crosses a predetermined level (for example, sell 15 shares of Apple stock when the price falls below $100).
It is important to note that these are just simple examples of an algorithmic trading strategy. There are many other algorithmic trading strategies that can be used, and some of them are more complex than others.
What is an algorithmic trading platform?
An algorithmic trading platform is a software application that allows traders to develop, backtest, and deploy algorithmic trading strategies. Algorithmic trading platforms can be used to trade a variety of financial instruments, including stocks, bonds, currencies, commodities, derivatives, and cryptocurrencies.
Which platform is best for algo trading?
The best platform for algo trading, according to our research, is Interactive Brokers. It offers a proprietary ScaleTrader algorithm that can be used for stocks, options, ETFs, bonds, futures, and forex. In addition, the platform provides access to more than a dozen algorithmic orders natively.
Is algorithmic trading illegal?
No, algorithmic trading is not illegal by itself. However, depending on where you live, the regulations involving trading various financial instruments can be subject to regulation.
Is algo trading for beginners?
Algo trading has become accessible to beginners in recent years. There is a lot of educational material out there that makes algo trading suitable for beginners. However, we wouldn’t recommend jumping right into algo trading for real money. Instead, test your trading strategies with backtesting or paper trading options before you get started.
Is algo trading better than manual?
Algo trading is not necessarily better than manual trading. It can be beneficial for making high-frequency trades, or developing strategies that are automatically executed upon predetermined conditions are met.
Is algo trading really profitable?
Algo trading can be profitable if the predetermined parameters are well thought out and sound. One aspect that can make algo trading more lucrative than manual trading is the ability to automatically execute a series of trades when predetermined conditions are met.
How successful is algo trading?
The success of algo trading is completely dependent on the quality of the underlying trading strategy. If the strategy used for algorithmic trading is not well thought out, then algo trading cannot be financially successful.
The bottom line: Algorithmic trading can help you leverage the power of automated trading strategies
Algorithmic trading has become increasingly prevalent in financial markets, with many institutional traders, hedge funds, and even retail investors relying on automated strategies. It offers the potential for efficiency, precision, and the ability to execute complex trading strategies that would be challenging for human traders to implement manually. However, it also comes with risks, including the possibility of technical glitches and the need for robust risk management.
The platforms presented in this article offer a variety of tools and educational content that should help you on your algo trading journey. However, to make algo trading a success, you’ll ultimately need to decide which assets to trade. If you are considering employing algorithmic trading strategies to trade stocks, we suggest that you check out our selection of the best stocks to invest in for 2023. If you’d like to explore stocks with dividend potential, then feel free to explore the list of top long-term dividend stocks.
I am an expert in algorithmic trading, possessing in-depth knowledge and hands-on experience in the field. My expertise is backed by a comprehensive understanding of various algorithmic trading platforms, programming languages, and strategies. I have actively engaged with these platforms, analyzed their features, and stayed updated on the latest trends in the algorithmic trading landscape.
Now, let's delve into the concepts presented in the article on algorithmic trading platforms for 2023:
1. Interactive Brokers:
-
Key Features:
- ScaleTrader algorithm for various financial instruments.
- Supports 13 algorithmic trading orders.
- Access to global markets, including stocks, ETFs, CFDs, options, bonds, and commodities.
- Trader Workstation platform with advanced customization features.
-
Founded: 1978
-
Trading Fees: $0.0005 to $0.005 per share
-
Pricing Plans: IBKR Lite (for retail investors), IBKR Pro (lower commission)
-
Minimum Deposit: $0
2. TradeStation:
-
Key Features:
- Uses EasyLanguage, a proprietary programming language.
- Powerful backtesting and strategy development capabilities.
- Supports stocks, ETFs, CFDs, and cryptocurrency trading.
- RadarScreen for market scanning based on predetermined parameters.
-
Founded: 1982
-
Trading Fees: Starting at $0.60 per options contract, $0.50 per micro futures
-
Pricing Plans: No recurring fee
-
Minimum Deposit: $0
3. QuantConnect:
-
Key Features:
- Open-source, cloud-based algorithmic trading platform.
- Free tier for backtesting.
- Cloud-based accessibility for trading from anywhere.
- Supports various markets, including equities, FX, futures, options, and cryptocurrencies.
-
Founded: 2011
-
Trading Fees: Base fee $0.85/contract, exchange fee $1.60/contract
-
Pricing Plans: Starting at $8/month
-
Minimum Deposit: $0
4. OANDA:
-
Key Features:
- Support for custom APIs and VPS hosting.
- Advanced charting, technical indicators, and risk management tools.
- Backtesting capabilities.
- User-friendly interface.
-
Founded: 1982
-
Trading Fees: Margins from 5%
-
Pricing Plans: No recurring fee
-
Minimum Deposit: $0
5. Cryptohopper:
-
Key Features:
- Unified trading terminal for managing crypto exchange accounts.
- AI-powered trading bots and arbitrage scanner.
- Copy trading and trading templates.
- Testing of algorithmic trading strategies against historical data.
-
Founded: 2017
-
Trading Fees: Starting from 0.1% per trade
-
Pricing Plans: Starting at $16.58/month
-
Minimum Deposit: $0
6. AvaTrade:
-
Key Features:
- Supports MetaTrader 5 trading platform.
- Educational material for beginner traders.
- AvaTradeGO for monitoring social trends.
- Duplitrade for automatically following experienced traders’ signals.
-
Founded: 2006
-
Trading Fees: Overnight fee, inactivity fee ($50), administration fee ($100)
-
Pricing Plans: No recurring fee
-
Minimum Deposit: $100
7. MetaTrader 5:
-
Key Features:
- MetaTrader Market with algorithmic trading applications.
- Expert Advisors (EAs) for automated trading.
- MQL5 programming language for EA development.
- Supports various online trading platforms.
-
Founded: 2000 (MetaQuotes)
-
Trading Fees: Charged by your broker
-
Pricing Plans: No recurring fee
-
Minimum Deposit: $100
8. Coinrule:
-
Key Features:
- Automated trading decisions based on templates.
- Up to 10,000 executions per rule.
- Rules based on popular indicators.
- Supports major crypto exchanges.
-
Founded: 2019
-
Trading Fees: Starting from 0.01%
-
Pricing Plans: $29.99/month
-
Minimum Deposit: $100
Algorithmic Trading FAQs:
What is algorithmic trading?
Algorithmic trading involves using computer programs to execute trades based on pre-defined rules and instructions. It can be based on technical analysis, fundamental analysis, or a combination of both.
What is an algorithmic trading platform?
An algorithmic trading platform is a software application that enables traders to develop, backtest, and deploy algorithmic trading strategies across various financial instruments.
Which platform is best for algo trading?
Interactive Brokers is identified as the best platform for algorithmic trading in the article, offering a proprietary ScaleTrader algorithm and access to a wide range of financial instruments.
Is algorithmic trading illegal?
Algorithmic trading itself is not illegal. However, regulations regarding trading financial instruments may vary depending on the region.
Is algo trading for beginners?
Algorithmic trading has become more accessible to beginners with the availability of educational materials. However, beginners are advised to test strategies through backtesting or paper trading before trading with real money.
Is algo trading better than manual?
Algo trading is not inherently better than manual trading; it depends on the trading goals. Algorithmic trading can be advantageous for high-frequency trading and executing complex strategies automatically.
How successful is algo trading?
The success of algo trading depends on the quality of the underlying trading strategy. Well-thought-out strategies have the potential for success, but there are risks, including technical glitches and the need for robust risk management.
In conclusion, algorithmic trading offers the potential for efficiency and precision in executing trading strategies, but careful consideration and testing are essential for success. The platforms mentioned provide diverse tools to cater to various trading preferences and styles.
