Broker to Trading

The answer to the question what is the best broker for automated trading is that it depends on a number of factors. Firstly a broker needs to support automated trading, that is providing a platform which supports the use of computer programs to execute trades on behalf of the trader. A number of platforms support automated trading. MT4 is a popular platform, but there are others including cTrader, JForex and MT4's successor MT5.

It is not necessary to trade using an ECN broker (some brokers have stopped using this term), but some traders may find the kind of infrastructure they provide helpful for the kind of strategies they wish to trade using computer programs. These brokers may offer high speed order execution, low average spreads on the most liquid markets (plus a commission charge), access to liquidity via the broker, co-location with liquidity providers using for example Equinix servers and no dealing desk intervention, allowing a wide range of trading styles.

Because arguably there is not a best broker per se, the table above provides a range of regulated brokers offering automated trading platforms, along with the minimum deposit required to trade. This said there may exist a best broker for a trader, based on such factors as the trading platform they may wish to use and the styles of trading they wish to employ.

Thus for automated trading the field is limited to brokers which actually support automated trading by firstly providing a platform with this functionality and then providing an account which allows automated trading (in the case of MT4 or MT5, allowing the use of Expert Advisors (EAs), which are trading robots executing strategies on behalf of the trader). The brokers in the comparison table all provide platforms and allow the execution of automated trading strategies.

Some but not all of these brokers offer ECN accounts. ECN accounts though are not necessarily required to trade using automated strategies, but they can provide an environment which is suited to running robots, in additional to offering a platform. The trader does not necessarily need to use a platform other than MT4 especially for Forex trading, but they may wish to use the expanded features offered by MT5 or the capacity to run cBots offered on cTrader or the capacity to run scripts on JForex.

Indeed, if the trader wishes to write their own strategies or indicators, they may find a particular underlying languages offered by these platforms preferable. For example, JForex uses the Java programming language, cTrader uses the C# language while MT4 uses a language which is similar to C++ (MQL4). Each platform has its own particular functionality, for example JForex has a relatively large number of technical indicators inbuilt into the platform.

Automated trading can be seen as referring to the process of automating the way a human trader may trade. Thus the impetus to do this can come from a variety of sources, associated with the experience of the human trader in relating to the complexity and scale of the market. Although algorithmic trading is automated trading, a distinction can in theory be made by seeing algorithmic trading as imposing computer programs in areas where the human trader would not have a role. This is a distinction though which in practice can be complex, as there is an argument to be made that the human trader is essential to dealing with markets and the application of any algorithm has a human source in its design.

This said the true distinction is perhaps one of scale, as computer programs can go where the human trader cannot for example in high frequency trading and other algorithmic trading methods at scale. At a more prosaic level this can be seen as the issue a trader may face when applying a strategy to the markets, that they tire and make mistakes, which is where the need to use automated trading comes into play. However, the trader may also consider taking a break and using their capacity to exercise discretion and intuition when rested and confident, even if the decisions is to choose an EA and market to trade, which is to say that there is a role for human discretion even in automated trading.

Best Broker For Automated Trading

The pick of best broker for automated trading is Dukascopy Bank, with the caveats that other brokers could be chosen and what is the best broker can depend on a number of factors which may be related to the way a trader trades and features offered. The reason Dukascopy Bank is chosen is partly because it offers both MT4 and JForex, thus offering support for MT4 traders and trader who may wish to try JForex, which is arguably a powerful, yet user friendly platform. On JForex it has a relatively large number of markets to trade (one of the other reasons it is picked), with 500+, the bulk of which is Stocks CFDs but with other markets such as Soft Commodities as well as Forex.

Dukascopy Bank is an ECN broker and focuses solely on this type of trading (broadly speaking this is a kind of broker which may be suited to automated trading). Dukascopy Bank operates the SWFX Marketplace which is a liquidity pool developed from its operations as a bank (banks are involved at the forefront of the Forex market). Dukascopy Bank fully supports automated trading and has no restrictions on trading styles. Automated trading is available via Expert Advisors (EAs) on MT4 and via scripts (written in Java) on JForex. JForex itself is a relatively user friendly platform, albeit with powerful features.