Broker to Trading

A CFD is a Contract For Difference, which is a contract between the trader and the CFD provider based on the difference between the value of the CFD at the beginning and end of the trade. The value of the CFD is referenced to the value of an underlying market; a CFD allows the trader to trade a market based on its price movement without having to own it. Some CFD providers offer online trading platforms that allow the trader to execute automated trading strategies. These are programs that execute trading strategies on behalf of the trader, trading CFD markets.

Different platforms may have different implementations of automated strategies and may use different languages. This matters because although the trader may simply wish to use automated strategies developed by others, they may also wish to implement them themselves, perhaps using a strategy they have developed or used when trading on their own behalf. Automated trading strategies are also called trading robots, which captures the sense of computer programs executing strategies on behalf of the trader.

Some factors to consider when thinking about using a robot are that while the strategy may work when backtested in the trading platform, it may not work when run on the real market. A trading robot will tirelessly, accurately, and rapidly execute strategies, but this can result in rapid accumulation of losses in the trader's account. The potential advantage of the human trader, in that they can exercise trading discretion, is absent from the trading robot, and it will execute the program until stopped. This matters, as trading markets are complex, and trading patterns, which, for example, an indicator is looking for, may not have the expected outcome. When exercising their own discretion, a human trader may be able to see this and take a different course of action than a computer program may not.

Programs can be altered to cover different contingencies, but this can result in a rule set or algorithm which is too complex. Both human traders and robots trade to some extent in the same way; they execute rules, perhaps based on an indicator, for example. But there is a spectrum of ways to deal with the market, covering the range from flexible to inflexible applications of the rules. The human trader has an advantage over the flexible; the computer program has an advantage over the inflexible. Inflexible can be an advantage, as the human trader may exit from a trade that does not work out for many reasons, whereas a computer program will stay with it if programmed to do so. Therein is the disadvantage if the trade does not work out.

It can be possible to adjust robots as they run, and this can help add back some of the advantages of human flexibility. Conversely, the trader who trades using their own discretion when to execute trades may wish to consider automated trading as a way to tackle some times or market conditions or types of trades which they may find problematic and try to find a perhaps elusive harmony of human judgement and flexibility, and machine precision and reliability.

More advanced algorithmic techniques may focus on areas that are not possible for humans to tackle, such as high-frequency trading, or use techniques such as machine learning to look for patterns in large, complex data sets. However, the typical trader will be using a robot that executes a strategy based on indicator signals, like what they would execute themselves, but with the potential advantage of tireless, unemotional execution.

The brokers in the table offer CFD trading on platforms which offer automated trading, namely MT4, its successor MT5, cTrader, TradingView, and JForex. MT4 and MT5 have automated trading strategies called Expert Advisors, frequently referred to as EAs. These can be used, modified, or built in MQL4 for MT4 or MQL5 for MT5. TradingView has Pine Script, cTrader offers cBots and uses C#, while JForex utilises the JAVA programming language. The trader may find a platform of interest because they may already know the language.