FX, forex, foreign-exchange market, currency trading – whatever you choose to call it, this high-potential market is unique in more ways than one. Not only is it extremely liquid, it operates around the clock, across the world and trades in volumes larger than all other markets combined. The forex market is a competitive, open market, as nothing but capital is required to enter.
Its flexibility, coupled with the success of countless traders with different levels of expertise, proves that there is more than one way to eat an elephant. However, one of the biggest drawbacks of the forex market has always been its high time consumption. As currency values constantly change, traders usually needed to watch these variations in order to hone in on a good trade. That is, until automated forex trading software came along.
While major institutional investors were the first to implement and carry out algorithmic trading, the influx of automated forex trading software intended for the personal forex traders is now a rapidly growing market.
Quick look: the best forex trading software
Benefits of automated forex software software
It’s no secret that the potential capabilities of Artificial Intelligence (AI) can, in many ways, far surpass the abilities of humans. And yet, when it comes to forex trading, an Expert Advisor (EA) or a robot – as algorithmic trading is often referred to – does not beat out the human mind in all cases. However, it does offer several benefits that can make you a better trader. The top reasons for implementing AI into your trading scheme through automated software:
- AI operates in real time, cuts out the lag time for analysis, increases the speed of trade execution, and hopefully, increases your profits.
- AI is unbiased and prevents you from being misled by human emotion or misconceptions. For example, you may subconsciously avoid trading a certain currency pair given a negative past experience even if a good opportunity arises again. Your automated trading software can lend an objective hand and help you avoid human pitfalls.
- AI programs can multitask much more accurately than humans. Automated forex trading software can manage multiple accounts at the same time, as opposed to conducting singular manual trades without it.
- AI makes decisions based on historical data and analysis, which can help traders learn from past mistakes. However, good backtesting on the part of your trading robot does not ensure it will perform as well in the future.
The best forex trading software
While there are dozens of software options, these platforms are among the best that could potentially match your experience and the level of risk you’re willing to take.
FOREX.com, Benzinga’s top forex broker, tops this list due to its MetaTrader4 platform, education, tools, and more. MetaTrader 4 specializes in the forex market and the implementation of automated trading and supports literally thousands of trading robots and technical indicators.
Its parent company, MetaQuotes, was a pioneer in the development of forex trading and charting platforms. While it is not itself an actual automated trading software, it boasts the widest selection of trading applications in the world, up to 1,700 different trading robots. Not sure which is the right one for you? Several EAs supported on MT4 are offered for rent as well as purchase, so you can try products out for as little as one month, and up to one year.
Both MT4 and its younger brother MT5, which focuses more on securities and futures markets, are available through dozens of online forex brokers, but FOREX.com is our top pick. The firm will soon support MT5.
Note: If you are a newbie trader and just getting started, stick to the spot market (immediate trades versus futures) and go for MT4. Both versions of MetaTrader can be used on your desktop, tablets, and smartphones, and are available for both iOS and Android.
This trading platform is rich in resources for traders focused on futures and forex. While this platform offers fewer options than the thousands available on MT4, Ninjatrader’s 100+ technical indicators and automated trading options have received ample positive reviews from traders.
In fact, the platform has a special community of resources available at ninjatraderecosystem.com, where you can purchase a trading robot that carries out order executions, receive daily education and training as well as customize your trading indicators, signals and strategies. A market replay feature also allows traders to download historical data and simulate trades for further practice. As it continues to grow, NinjaTrader has gained substantial accolades. Last year, it was awarded Best Trading Software by Stocks and Commodities 2017 Readers’ Choice Awards.
While it cannot compete with MT4 and MT5 in terms of size – which together control roughly half of the retail-user market share – there are several traders that have made the leap from MT4 to NinjaTrader for its high-quality charting and increased customization features, as well as increased access to multiple data feeds. However, NinjaTrader’s more advanced layout and advanced tools are not geared towards newbie traders. On the contrary, the platform’s aims at customers like the already professional trader who is well versed in trading terminology, layout and features.
So if you are just starting out, NinjaTrader may be a platform to consider in the future once you’ve got some experience under your belt. NinjaTrader always offers free advanced charting, strategy backtesting and trade simulation. In terms of services for payment, NinjaTrader provides several options: You can lease the program for three months at $180; six months at $330; or one year for $600.
You can purchase a lifetime lease for $999 or you can opt out of buying/leasing the platform and carry out trades through a chosen broker, but this will result in higher total commission fees than for those who lease or purchase the program. For U.S. customers, NinjaTrader is available through Forex.com and Oanda NinjaTrader itself does not offer its services for smartphones or tablets, though there are several plug-ins on the market you can put on your device to be notified of trade updates.
If you know you’re interested in trying out algorithmic trading but the idea of choosing between dozens or even hundreds intimidates you, both TD Ameritrade and Interactive Brokers have garnered a strong reputation for in-house automatic trading features.
Thinkorswim operates under the parent company TD Ameritrade, an American veteran in the finance industry. Thinkorswim sits among the top brokers for the availability of currency pairs. If you are interested in trading stocks, options, futures and forex, you can comfortably keep all your trades together under one concise account.
Most importantly, Thinkorswim’s customizable and automated trading platform has received significant positive reviews from the trading market. You do have to sign up to use the platform’s newsletters. If its robot can help you accrue lofty profits, it will probably be a small price to pay.
Note: Thinkorswim is not a platform for beginning traders, regardless of whether you focus on forex or other commodities, evident in its hefty $3,500 minimum deposit. However, you can earn up to 60 days of free commission charges as a new client. Thinkorswim offers a range of mobile trading options, available on all Apple phones, tablets and watches, as well as Android smartphones and tablets.
4. Interactive Brokers
Interactive Brokers offers a similar breadth of currency pairs as Thinkorswim, with more than 100 to choose from. IB’s Scale Trader is a fully-automated trading algorithm used for enhancing performance in scale trading on the IB platform. While it can be easily used for forex trades, it is also applicable to stocks, futures and more.
This is also true of IB’s accumulate/distribute algorithm. The company offers a handful of different customizable automated trading systems to support the particular type of trades you are making. As an actual brokerage firm, IB’s fees are carried out through commissions for trades, which are midrange for international trades, while their prices are more competitive than the average for U.S. trades.
Interactive Brokers offers Android and iOS slimmed-down versions of their desktop software through mobile devices.
Risks involved with forex trading
It’s possible you’ve already read raving reviews about other well-known robot-supported trading platforms like XTB, eToro, FXCM or Trading Station – none of which accept U.S. clients. This is due to the restrictions implemented in the Dodd-Frank Act of 2016, which banned CFD trading (a popular form of derivative trading) in an effort to protect consumers who had, in the past, lost the vast majority of trades partly due to the fraudulent practices of brokers. While these platforms are available across most other continents, make sure you are still practicing safe trading under more lenient laws.
Using AI through algorithmic trading is anything but an assurance of good performance. These programs are fallible for many reasons in their own right, otherwise, every single trader would be using them. Keep in mind that automated software does not guarantee an infinite amount of successful trades, it just offers you more information with which to interpret the market.
No matter how much research you do, remember that the perfect forex trading robot simply does not exist. Humans excel at following economic conditions and current events which could influence currency prices, and robots are far better at discovering positive trends and trading signals. The best trader will use a combination for the best executions.