Automation is becoming prevalent in the trading community due to the benefits it provides traders, among them the ability to reduce human error while trading as well as the ability to customize trading strategies beyond previous standards. Automated trading involves creating a system to parse incoming market data and apply a set of user-defined rules to make trading decisions based on the incoming data. In the early days of automated trading, traders programmed these systems by hand and connected their system to a broker or exchange via an API for order execution. Today many traders seek automation but do not have the coding experience to program a system by hand. However, many modern platforms bridge the gap between programmer and trader by allowing for the customization and sophistication of automated trading without requiring the user to code. These platforms allow the trader to create an automated system using the tools within the platform, and then connect to a broker's servers via API to retrieve live prices, access account information, and execute trades. Less-structured solutions also exist for those traders who are familiar with coding but need a bit of guidance. This article will briefly introduce some of these solutions and explain how to get started.
Trading Station and MetaTrader4 are all-in-one platforms built for traders of any background. With both manual and automated trading capabilities, they make the transition from manual to automated trading natural and easy. Each platform also includes built-in backtesting and optimizing software so automated traders can test and perfect their strategy before turning it on for live trading.
FXCM Trading Station automated strategies
Trading Station, FXCM's signature trading platform, offers point-and-click traders an interface for manual trading and charting. It also offers automated trading capabilities and comes with several premade trading strategies designed for beginner-level automated traders. To use one of the premade strategies, the user inputs the trading logic that the strategy will use to execute trades, so at no point is the trader using a 'black box' type of system that places trades using some masked logical formula. For example, the MACD Sample strategy uses the common Moving Average Convergence Divergence indicator to place trades when certain moving averages cross over/under one another. The user must choose the calculation methods for each of the given variables that will be used for order execution, as seen below:
Figure 1: Choose the parameters for your automated trading strategy (FXCM Trading Station)
The platform's built-in backtester can be used to test the different settings of the strategy. While past performance cannot predict future results, the backtester can be used to ensure the strategy is working properly (opening trades at the correct time, etc.) and to get an idea of how to fine-tune the parameters for best performance. Once satisfied, an optimizer can be used to test and compare the performance of several variables at once.
MetaTrader4 Expert Advisors
Another popular platform with ready-to-go automated trading strategies is MetaTrader4 (MT4). Automated strategies called expert advisors, or EAs, are programmed to run on the MT4 platform and function similarly to the automated strategies for Trading Station. The user will select an EA and adjust the parameters the EA will use to open and close trades so the trader is able use a customized strategy without having to program it from scratch.
Figure 2: Customize your EA (FXCM MetaTrader4)
MT4 also comes with a backtester and an optimizer built-in, making it easy to test and run the strategy within a single platform. The large MT4 community offers many open-source resources for EAs or for creating your own EA. Traders can obtain open-source EAs and adjust them to fit their needs or visit one of the many communities for MT4 traders to find support.
In addition to these two platforms, there are many more specialty platforms each offering unique features to meet the needs of automated traders. Most specialty trading platforms utilize an API connection to bridge a trader's brokerage account to the platform. This means a trader can choose one of the many available platforms which meet their needs and place trades directly from the platform, making it easy to create custom trading strategies without knowing how to program.
NeuroShell Trader Forex* was designed specifically for traders, not programmers, with AI in mind. This unique platform allows traders to harness the power of AI without learning how to program. The user interface guides the trader through constructing indicators, developing trading rules, and using neural networks for predictive insights, all without requiring the user to write a single line of code. NeuroShell Trader Forex connects to FXCM trading accounts via API.
NinjaTrader* is a well-known platform used for both manual point-and-click trading as well as automated trading. It has thousands of third-party indicators, automated strategies and apps available for use or you can customize your own using its C#-based trading framework.
Designed for those with little-to-know programming expertise, Quantra BlueShift* provides the user with pre-made strategies and an easy-to-use interface for creating custom trading logic. The user can customize the strategy by adjusting the code or simply by pointing and clicking. The platform currently supports backtesting and is soon to support live trading as well.
Python is a popular programming language for quantitative traders, data scientists, and professionals in related fields. For that reason, FXCM developed the fxcmpy Python wrapper to make API trading more Pythonic—that is, simpler and more concise. Fxcmpy allows the user to open trades, subscribe to real-time streaming data, pull account information from the server in real time, and more using only a few lines of code. For the individual coming to API trading from a programming background, fxcmpy can help you harness the powerful REST API for trading automation.
To summarize, not being able to write code does not mean one must write off automated trading. There are many alternatives like the sophisticated platforms discussed in this article. For more information, be sure to check out the FXCM website or email us at firstname.lastname@example.org.
*Links to third-party sites are provided for your convenience and for informational purposes only. FXCM bears no liability for the accuracy, content, or any other matter related to the external site or for that of subsequent links, and accepts no liability whatsoever for any loss or damage arising from the use of this or any other content. Such sites are not within our control and may not follow the same privacy, security, or accessibility standards as ours. Please read the linked websites' terms and conditions.
Trading Forex/CFD's on margin carries a high level of risk and may not be suitable for all investors as you could sustain losses in excess of deposits. Leverage can work against you. The products are intended for retail, professional and eligible counterparty clients. For clients who maintain account(s) with Forex Capital Markets Limited ("FXCM LTD"), retail clients could sustain a total loss of deposited funds but are not subject to subsequent payment obligations beyond the deposited funds and professional clients could sustain losses in excess of deposits. Prior to trading any products offered by Forex Capital Markets Limited, inclusive of all EU branches, FXCM Australia Pty. Limited, FXCM South Africa (PTY) Ltd, any affiliates of aforementioned firms, or other firms within the FXCM group of companies [collectively the "FXCM Group"], carefully consider your financial situation and experience level. If you decide to trade products offered by FXCM Australia Pty. Limited ("FXCM AU") (AFSL 309763), you must read and understand the Financial Services Guide, Product Disclosure Statement, and Terms of Business. The FXCM Group may provide general commentary which is not intended as investment advice and must not be construed as such. Seek advice from a separate financial advisor. The FXCM Group assumes no liability for errors, inaccuracies or omissions; does not warrant the accuracy, completeness of information, text, graphics, links or other items contained within these materials. Read and understand the Terms and Conditions on the FXCM Group's websites prior to taking further action. Read full disclaimer.