trading platform<\/a>. There is no requirement to use a platform that is compatible with MT4, as you won\u2019t be relying on software. Instead, you simply need to place the respective order as you normally would.<\/p>\nCopy Trading<\/h3>\n
We should also mention Copy Trading as a viable option. This is where you will select an expert trader that is active in your desired field (stocks, bonds, cryptocurrencies, etc.), and then copy their buy and sell positions like-for-like. On the one hand, this isn\u2019t strictly an algorithmic trading system per-say, as your chosen trader will be performing research and placing orders manually.<\/p>\n
![\"Copy](\"https:\/\/learnbonds.com\/uk\/wp-content\/uploads\/sites\/2\/2020\/09\/Screenshot-2020-09-07-at-17.05.46.png\")
<\/p>\n
With that said, the Copy Trading process provides you with exactly the same end-result. That is to say, once you allocated some fund to the trader, there is nothing more to do.\u00a0On the contrary, you can sit back and enjoy a 100% passive strategy.<\/p>\n
You can exit your position at any given time, with the proceeds placed instantly in your brokerage cash account.<\/p>\n
Why People Do Algorithmic Trading<\/h2>\n
Still not convinced about what algo trading systems can do for your long-term investing goals? Below you will find some of the many benefits associated with the phenomenon.<\/p>\n
Scan the Markets 24\/7<\/h3>\n
It goes without saying that human traders are limited in how much time they can dedicate to trading. At the forefront of this is the research process. That is to say, performing technical analysis on a manual basis can require hours of dedication each and every day. After all, the financial markets can change course at an incredibly fast pace.<\/p>\n
![\"Learn](\"https:\/\/learnbonds.com\/uk\/wp-content\/uploads\/sites\/2\/2020\/09\/charts-and-indicators-in-metatrader-4-1.png\")
<\/p>\n
On the flip side, algorithmic trading systems can scan the financial markets on a 24\/7 basis. They never experience fatigue either, so you can alleviate the risk of making judgements of error. Ultimately, by employing the services of an automated algorithm, you will never miss a trading opportunity again!<\/p>\n
Trade Around the Clock<\/h3>\n
This particular benefit leads on from the section above. Not only can the algo trading system research around the clock, but it can do the same when it comes to placing trades. This means that by leaving the robot running at all times, you can buy and sell financial instruments all day, every day.<\/p>\n
Millions of Scenarios<\/h3>\n
When a human trader analyses the markets, there are only so many scenarios that the individual can consider at once. This is in stark contrast to a pre-programmed algorithm. In fact, when you consider the capabilities of cutting-edge technologies like AI, the algorithm can consider millions of potential outcomes each and every second. Crucially,\u00a0 the software is going to outperform the human brain by a considerable amount.<\/p>\n
Trade Thousands of Assets Effectively<\/h3>\n
![\"passive](\"https:\/\/learnbonds.com\/uk\/wp-content\/uploads\/sites\/2\/2020\/09\/Screenshot-2020-09-07-at-17.04.44-300x223.png\")
Seasoned traders will often specialise in a single asset class \u2013 like stocks, forex, or bonds. In fact, some traders will niche down even further \u2013 for example, only trading currencies denominated in US dollar or stocks listed on the NASDAQ.<\/p>\n
This makes perfect sense, as it allows the trader to focus on a small set of pricing charts and ultimately, become an expert in the respective instrument.<\/p>\n
However, this does mean that you are potentially missing out on a significant number of trading opportunities.<\/p>\n
At the other end of the spectrum, an algorithmic trading bot can trade thousands of financial instruments at any given time. This is because the software is pre-programmed to follow a set of strict conditions, of which there is no limit.<\/p>\n
100% Passive<\/h3>\n
If opting for a fully-automated trading system, you will be buying and selling assets in a 100% passive manner. This is something craved by many investors \u2013 especially those that do not have the required time to dedicate to trading. With that said, it is important to remember that there is no guarantee that your trading robot will make you money. Instead, if the software hasn\u2019t been programmed well, you could make a loss.<\/p>\n
Algorithmic Trading Strategies<\/h2>\n
There are many algorithmic trading strategies that a provider might consider using. Some systems will rely exclusively on just one strategy, while others will deploy many. While discussing hundreds of algorithmic trading strategies is beyond the remit of this guide, below you will find a selection of the most widely used.<\/p>\n
Arbitrage Trading<\/h3>\n
Arbitrage trading is one of the most sought-after strategies in the online investment space. For those unaware, this particular strategy looks to profit when an asset is priced differently on two or more brokerage sites.<\/p>\n
A simple example would be:<\/p>\n
\n- Nike shares having a buy price of $100.50 on Broker 1<\/li>\n
- Nike shares having a selling price of $100.55 on Broker 2<\/li>\n<\/ul>\n
Now, profiting from arbitrage opportunities is virtually impossible when attempting to do it on a manual basis. For example, you would need to manually check each and every price across all of the brokers that you have accounts with.<\/p>\n
When you consider that online trading platforms offer thousands of financial instrument, this just wouldn\u2019t be possible. Even if you were able to do this, arbitrage opportunities typically remain in place for a matter of seconds. As such, you likely wouldn\u2019t be able to act on the opportunity fast enough.<\/p>\n
This is where an algorithmic trading system can help, not least because it can perform all of the aforementioned duties in micro-seconds.<\/p>\n
Trend Strategy<\/h3>\n
As the name suggests, this particular strategy looks to follow market trends and cycles. That is to say, if an asset is enjoying a prolonged period of bullishness, the algorithmic trading system will look to follow suit by placing a buy order. Similarly, if an asset is in a bearish cycle,\u00a0 the algorithmic will place a sell order.<\/p>\n
With that said, executing a trend strategy is easier said than done. This is why the software will operate alongside technical indicators and machine learning technologies. It will specifically analyse metrics like the channel breakouts and moving averages.<\/p>\n
Then, on the balance of probabilities, the algorithm will determine which way the asset is likely to move in the short-run. Naturally, the trend strategy employed by the software won\u2019t always get its prediction right. As such, each trade will have an exit plan in place \u2013 notably in the form of stop-loss orders.<\/p>\n
Algorithmic Trading Python<\/h2>\n
Algorithmic trading software is typically built using a specific programming language. At the forefront of this is python, not least because the language has the framework to meet the requirements of an autonomous trading system. Don\u2019t forget, the overarching objective of the algorithm is to outperform the markets.<\/p>\n
In order to do this, it needs to consider millions of potential trading outcomes each and every second.\u00a0 The software will look to do this on a rolling 24\/7 basis \u2013 potentially across thousands of assets. As such, algorithmic trading python systems<\/a> are ideal for this purpose.<\/p>\nSo now that you know how algo trading systems work \u2013 as well as the different types available to you, we are now going to discuss platforms. Below you will find a selection of providers that allow you to trade in a fully, or semi-passive manner.<\/p>\n \n
\n
\n
\n
\n
\n
AvaTrade<\/strong><\/h3>\n <\/div>\n <\/div>\n \n
\n
\n
<\/p>\n
If you are looking for a fully-automated algorithmic trading robot, you will need to find a platform that supports MT4 or MT5. The former, in particular, is typically the go-to option for developers, as they know that MT4 is the most widely-used trading platform in the space. A good choice in this respect is AvaTrade - which supports both MT4 and MT5.<\/p>\n
The platform is home to thousands of financial instruments, which ensures that your chosen bot will have access to the assets that it wishes to trade. This includes CFDs in the form of stocks, ETFs, futures, hard metals, energies, and more. AvaTrade does not charge any trading commissions.<\/p>\n
The platform also offers tight spreads, and fee-free deposits and withdrawals. You can fund your account with a UK debit\/credit card or bank transfer. Minimum deposits start at \u00a3100. After registering, you will then need to log into MT4\/5 with your AvaTrade credentials and install your chosen robot.<\/p>\n
Once you provide authorisation through MT4\/5, the algorithmic trading software will begin to buy and sell instruments on your behalf. Most importantly, AvaTrade is heavily regulated. It holds licenses in several countries, including Ireland, Canada, and Japan.<\/p>\n
<\/p>\n <\/div>\n <\/div>\n
\n
\n
\n
Our Rating<\/p>\n
\n
<\/div>\n <\/div>\n <\/div>\n <\/div>\n\n
\n
![\"AvaTrade](\"https:\/\/learnbonds.com\/uk\/wp-content\/uploads\/sites\/2\/2020\/03\/AVAtrade01.png\")
\n <\/div>\n <\/div>\n <\/div>\n
\n
\n
\n
\n <\/ul>\n <\/div>\n <\/div>\n \n
\n
\n <\/ul>\n <\/div>\n <\/div>\n <\/div>\n