Algorithmic trading is the biggest technological revolution in the financial markets space that has gained enough traction from the last 1 decade. Most of the equity, commodity, and forex traders (including the retail participants) are rapidly adopting algorithmic trading to keep up the pace. Roughly, about 75% of the trades in the United States are executed through automated systems, and the number keeps growing across the world. In this post, we are going to look at 5 excellent algorithmic trading platforms that you can use to build your trading systems.
What is an Algorithmic Trading Platform?
Before we dive deeper, let’s first understand what is an algorithmic trading platform. In layman terms, it is a piece of software that can help you code, backtest, and execute your trading algorithms. This software can be a desktop application, a mobile app of a web-based tool.
The whole idea of algorithmic trading is to convert your trading rules into an executable computer code which can be automatically (or semi-automatically) executed to place buy-sell orders. An algorithmic trading platform makes this whole process seamless by offering several readymade features and services.
Important Note: Algorithmic trading platforms can play a crucial role in building your trading systems, but that’s not all what you need to become a successful algorithmic trader. You may look at this article which explains algorithmic trading from scratch, and this one to learn how to formulate and implement a trading system from scratch.
Features of an Algorithmic trading platform
In order to qualify as a good algorithmic trading platform, the software should have the following bare minimum features:
- Ability to code your trading rules into an algorithm
- Ability to backtest the trading algorithm on historical data
- Should contain readymade technical indicators to use within the algorithm
- Visualization of stock data as charts
- Scanning feature to filter stocks which meet the criteria defined in the algorithm
- Position sizing and other risk management features
- Email or community support to help you with any issues
If you are evaluating an algorithmic trading software and any of the above 7 features is missing in it, you should probably dump it!
The software can be web-based, a desktop application, or a mobile app. For the convenient usage and considering how complex this thing can get, we recommend going for a desktop application followed by a web-based tool. Mobile app can be an additional add-on with the platform you chose, but only mobile-based tools may not be scalable.
Our top 5 Recommendations
Every year several algorithmic trading platforms get launched across the globe, but only a few of them make their way to the top.
We have evaluated around 50 such platforms so far, and have hand-picked 5 of them which we’ll discuss further in this article. The evaluation criteria were simple and based on below 3 primary factors:
- The platform should offer the bare-minimum 7 features that we outlined in the previous section
- It should be globally available irrespective of your region or country
- Suited for absolute beginners with no prior experience in computer programming.
Below are the recommendations. These recommendations are not in any particular order.
Note: We are not affiliated with any of these tools or platforms.
Quantopian is an excellent algorithmic trading platform for retail traders. It provides a perfect set of tools where you can research and develop your trading strategies from scratch.
Not only it provides a coding and backtesting platform, but there are several educational resources too available free of cost on their website. You can code your strategies in the python based interactive development environment (IDE) offered by Quantopian.
There are several historical datasets available free of cost which you can use to backtest your strategies. You can also compete with fellow traders by entering into the contests, and the contest winners may get an opportunity to license their algorithms on a profit-sharing basis.
It offers a collaborative environment where you can discuss, share, and ask for help from fellow Quantopian members. The member base is growing at a rapid pace which speaks about the popularity of this platform.
Previously Quantopian offered an ability to integrate the algorithms directly with your broker’s terminal, but now they have discontinued it. Hence it’s purely a research/backtesting platform and not a truly automated solution.
Founder(s): John Fawcett and Jean Bredeche
Year Started: 2011
Cost: Free with an option of buying premium datasets
Unique Selling Point (USP): Free of cost data, Educational videos, Periodic contests
Programming Languages supported: Python
Note: In November 2020, Quantopian announced it will shut down and will join Robinhood, a U.S.-based financial services firm and broker-dealer popular with millennials.
QuantConnect is another cloud-based algorithmic trading platform where you can code, backtest, and optimize your trading strategies.
It offers an IDE where you can code in multiple programming languages (C#, F#, and Python) and build your perfect trading system. Once you are satisfied with the system’s performance, you can deploy it live in your broker’s environment through QuantConnect itself.
The platform contains 400TB tick data free of cost through which you can backtest not only equity symbols, but also Crypto, Forex, and CFD.
It also has excellent collaboration features where you can connect and share with other community members. The instant messaging tool makes this even more intuitive.
Founder(s): Jared Broad
Year Started: 2011
Cost: Community edition is free. Premium packages start from $20 per month
Unique Selling Point (USP): Multiple programming languages, Broker integration, Execution speed
Programming Languages supported: C#, F#, Python
How to Get Started? : This tutorial page contains step-by-step instructions on how to get started with QuantConnect.
Amibroker is a versatile technical analysis cum algorithmic trading software that can be downloaded to your windows-based PC. Incepted in 1995 by Dr. Tomasz Janeczko, it is probably the oldest platform we compared.
Amibroker platform has come a long way since the last 25+ years and offers certain features which most of the other softwares lack. ‘Speed of execution’ is one of the aspects which stands out Amibroker from all its competitors.
We found backtesting in Amibroker to be 100 times faster than Quantopian and about 10 times faster than NinjaTrader. This high performance is mainly attributed to multi-threaded lightweight architecture and array-based programming language (AFL).
Amazing speed comes together with incomparable features like portfolio-level backtesting, Walk-forward & Monte Carlo simulation, auto-trading interface, advanced position sizing, batch processing, scoring and ranking, rotational trading, custom metrics, custom backtesters, DLL development kit, etc.
Amibroker’s user interface is very elegant and easy to learn even for absolute beginners. There are several drag and drop features which saves considerable time as compared to developing an algorithmic system using programming languages like Python. We did compare Amibroker with Python in one of our blog article. Read it here.
Several data vendors offer plugins to feed real-time data into Amibroker. And most of the brokers across the globe provide auto-trading interface tightly coupled with Amibroker’s strategy execution engine. This makes algorithmic trading easier and faster through this masterpiece.
Founder(s): Dr. Tomasz Janeczko
Year Started: 1995
Type: Desktop application
Cost: Free trial. Premium subscription starts from $279 for a perpetual license
Unique Selling Point (USP): Faster learning curve, High performance, All-in-one package
Programming Languages supported: Amibroker formula language -AFL (based on C)
How to Get Started? : Start with the official user guide here
MetaTrader is probably the most popular algorithmic trading platform that ever existed. It started as a charting software and slowly evolved into algorithmic/automated trading space.
Metatrader comes in two flavors MT4 and MT5. Although MT4 has higher adaptability among brokers and traders, MT5 is the latest version and boasts several cutting edge features.
Both MT4 and MT5 offer mobile apps on top of existing desktop applications which is an added advantage for the traders who are always on the go.
MT5 should not be considered as an upgrade over MT4 as both these softwares are catered to a different target audience. MT4 is mostly suitable for forex trading, while MT5 is a multi-asset platform which can be utilized for forex, stock, and futures.
Using this software, you can build your automated trading robots and also buy the existing robots from their marketplace. There is also an option of copy trading which can be initiated with one click.
Multi timeframe support, technical indicators, drawing tools, expert advisors are some of the other features that both MT4 and MT5 support. One of the striking features we found in this platform is the ability to rent a virtual server so that your algorithmic systems are operational 24/7.
Founder(s): Metaquotes Software Corp
Year Started: 2005
Type: Desktop application and Mobile App
Cost: Free of cost. Extra data subscription needed
Unique Selling Point (USP): Marketplace for algo trading robots, VPS renting, Huge userbase
Programming Languages supported: MQL4, MQL5 (based on C++)
How to Get Started? : Go through this official getting started page to start learning MetaTrader
NinjaTrader is a US based broker as well as an Algo trading platform. It is a desktop application which means you need to download it on your local computer to access the software.
The interface is quite intuitive and offers several advanced charting features that are generally missing in web-based platforms. You can perform order flow analysis and analyze market depth to speculate the directional movement.
They also offer ninja trader ecosystem where you can find several custom apps to personalize and enhance your trading experience. This ecosystem is community-driven with thousands of members across the world. Excellent community support stands out NinjaTrader among other algo trading platforms.
The option chain analysis is quite powerful with advanced alerting capabilities. You can get free data feed for US markets for a limited time.
With NinjaTrader, you’ll get a C# based framework where you can code your own indicators, drawing tools, trading systems, etc.
Founder(s): Raymond Deux
Year Started: 2003
Type: Desktop application
Cost: Free for charting, backtesting, and trade simulation. Subscription required for live trading with broker integration. Check the pricing page here.
Unique Selling Point (USP): Great community support, Excellent graphic capabilities
Programming Languages supported: NinjaScript (C# based)
How to Get Started? : This link contains a series of video tutorials for NinjaTrader 8
See below the comparison chart of the 5 algorithmic trading platforms we discussed so far. Clcik on the image to expand
Other Algorithmic Trading Platforms of Interest
This completes our review of the best 5 algorithmic trading platforms. We selected these 5 based on various criteria, in addition to their popularity among traders across the globe.
However, below are some of the other noteworthy tools that missed this list by a very small margin. Please look at them too if they fulfill your requirements.
In case you want us to review any other algorithmic trading platform, please put it in the comments section OR drop a note to firstname.lastname@example.org with details.
There are quite a few algorithmic trading platforms out there and I know it’s a very critical decision to choose one of them. In fact, traders spend years evaluating these platforms and end up in indecisiveness.
This article aims to narrow down your selection list by unfolding important features of the best 5 platforms we have evaluated so far.
- If you are a Python enthusiast and like a competitive environment with monetary rewards (through contests), go for Quantopian.
- If you would also like to auto trade in addition to all the features that Quantopian offers, Quantconnect is the best option for you.
- If you are looking for buying readymade trading robots with excellent community support and mobile app, MetaTrader is your go-to tool
- If charting and visualization is your priority, you should look at NinjaTrader
- And finally, if high performance, simplicity, and robustness is something that you fancy, then look no further than Amibroker.
Every single tool or software you come across will have certain pros and cons, so don’t aim for perfection, just select the one which solves most of your use cases.
In case, you are already using a platform for algorithmic trading, don’t switch to a new one unless you have a very strong reason. The learning curve to get familiar with a new tool will eat up all your precious time.
Let us know your thoughts in the comments section.