Broker to Trading

Forex is a complex market and there are a range of ways of trying to trade it. One way is for the trader to execute their own trades, using charting tools for example to provide a way to analyse markets and thus find a basis to enter, manage and exit a trade. The trader may wish to augment their own analysis with information sourced from other traders. Social trading is a way for the trader to see what other traders are thinking about and doing in the market. The trader can take social trading further and actually copy the trades of other traders into their own account (known as copy or auto trading).

The trader may have effectively automated some of the processes up to entering the trade, for example, using charting signals. However the Forex market is open continuously from open on Sunday to close on Friday and the trader may not be available to trade at some times. Thus traders can automate their trading to the extent of having a computer program make trades on their behalf. This program will be following a programmed set of instructions, or algorithm. Typically this algorithm will automate trade based on a technical indicator signal, so effectively emulating how the trader might trade.

There are other reasons for trading using a computer program to execute trades in accordance with programmed trading instructions (known as an online trading robot). Robots have an advantage in that they do not tire and assuming that there are no connection or equipment or other errors, can execute trades until stopped. Robots can also place trades more rapidly than a human, which may be taken further with high frequency trading. Even for lower frequency trading, the robot can maintain accuracy when repeatedly placing trades, where a human might tire.

However the robot does not exercise discretion in the way a human trader can. For example, a human trader may also trade by following an algorithm but they can also make on the fly decisions to change how they are managing a trade, enter or exit. However this said, the reality of trading can be that that these kinds of decisions to change tack can be difficult to get right or even make (which can also be a motivation to use social or copy trading, as these can take the weight off of the individual trader).

As the robot executes trades sometimes very rapidly, they may also incur drawdown (accumulated losses) into the trader's account. The advantage of a computer program is partly built around the fact it can execute an algorithm, this is what it does. But the market does not necessarily conform to the approach contained in this algorithm. It can be seen that there is perhaps a balance to be achieved by using the human and the robot approach in trading, even if simply at the level of refining algorithms by trading them, or switching back to human trading in some market conditions.

MT4 supports both human and robot trade execution. It has automated trading strategies (i.e. executable algorithms) called Expert Advisors (EAs). The trader can download ones already built or use them if provided on the platform but they can also build them in the MQL4 programming language.

MT4 has a successor platform, called MetaTrader 5 (MT5) which offers a number of enhancements on MT4 including MQL5, a new programming language for EAs. The trader may wish to try this platform, but the core functionality is similar, in that it supports human and robot trade execution with EAs.

There are other platforms for automated Forex trading. For example, cTrader is a platform which has automated trading, but also has a user friendly trading interface. JForex has a particularly large number of technical indicators built into the platform.

The trader can focus solely on human executed trades, by using a platform which supports only this functionality and may try one specifically designed to be suited to the human trader. These user friendly platforms can be designed with clarity and easy of use in mind. Some trading styles may be suited to what are termed non dealing desk brokers, as these brokers typically do not restrict styles which might be restricted elsewhere.

There are some styles which may be suited to a range of trading platforms, depending on how they are implemented. For example, news trading can generally be possible at a broker, but depending on how the broker trades the news some brokers may be more suitable than others.

Traders who trade before the news release and after it may find that the clarity and ease of use of the platform can be important, as they may be making judgements in a volatile market.

Traders who trade directly into the news or close before or after release, may find that a broker which allows for rapid order processing may be suitable. A broker which focuses on rapid low latency order processing may be suited to higher frequency trading (or robot trading in general, as this is based on advantage in speed and accuracy).

The brokers in the comparison table are a selection of well known Forex brokers offering together a range of features from automated trading with robots, to copy trading to pure discretionary trading with an intuitive platform.