Broker to Trading

Some CFD providers allow the trader to trade markets using robots. Robots are computer programs which automate trading strategies. Some automated strategies emulate those of the human trader, others take advantage of the capacity of a program not to tire and to work rapidly without errors. This page finds a selection of CFD providers for automated trading, organized into categories.

There are many different ways to trade. One approach is to use a strategy, such as entering and exiting a trade, based on an indicator signal. The human trader can exercise discretion about applying what is in effect a set of rules. However they may find that this results in chaotic trading or may find that this process becomes tiring.

A way to tackle the issues involved in applying rules as a human trader, is to let a computer program trade on the trader's behalf. A computer program executes an algorithm (a set of rules), which is where the term algo trading comes from. So robot programming languages can encode the rules in a strategy and execute them without tiring or making errors (barring connectivity, equipment or other issues).

If the strategy can be encoded as rules, the robots can execute it, but robots tend to be used for types of trading which may be difficult or impossible for the trader. The trader may find it increasingly difficult to execute at higher frequencies, for example. Robots can do this and indeed can execute at high frequencies that the trader simply could not. At higher frequencies factors such as speed of execution and connectivity come into play.

For such strategies or strategies where the time element is critical to the outcome of a trade, the trader may wish to consider a VPS (Virtual Private Server), which hosts algos, running them on equipment designed to deal with such computational overheads. To optimise the time taken to process orders, providers may host their servers in data centers, utilising equipment such as fiber optical interconnects and algorithms to route order fast and effectively. Even if time is not such a factor, a VPS allows the trader to run algos when they are disconnected, for example during a specific trading session.

To trade a market, a trading platform is required. Some trading platforms do not support trading with robots, however others are designed precisely for this. MetaTrader is a platform offered by a wide range of CFD providers, which supports automated trading. MetaTrader 5 (MT5) is the current release of MetaTrader but the prior release, MetaTrader 4 (MT5) is still widely used.

MetaTrader robots are called Expert Advisors (EAs) and can be downloaded normally for a fee or built by the trader, if they learn the programming language. MT5 has a different language than MT4. However there are more platforms with robots including those which allow the trader to build robots without programming. This said, progamming allows a level of control and detail which some traders may want.

Some providers offer accounts specifically designed for traders who use automated strategies. These may offer low spreads plus a commission charge. If the spreads are low, especially if the average is low, with a specified commission charge added, then the trader can have some knowledge basis for making rapid trades, if their strategy demands such an approach.

This pages picks out a range of CFD providers offering platforms and accounts supporting automated trading. However it recognises different types of approaches to automated trading. There are those who want to trade with fixed spreads, so it chooses a 'Fixed Spreads Automated Trading Provider'. Others may wish to focus on higher frequency trading, and a choice is made of 'Scalping Provider'. Those who trade using robots may find that speed of execution is important as well as non-dealing desk trading conditions and the acceptance of a wide range of trading styles. Thus a choice is made of 'Robots Trading Provider'. For some the platform may be important, so a choice is made of 'Automated Trading Platforms Provider'.