Selecting the Right Automated Trading Platform for Active Traders

Being an active trader, you trust and invest your hard-earned money in automated trading software. For this reason, the right computer software is necessary to ensure the effective and right execution of your trade orders.

When it comes to deciding what the right trading software for your specific requirements is, the foremost thing to look at is what exactly you need from a trading platform.

There are diverse software types available, and each one offers varied specializations and purposes. Once you know what you need, you can pick a platform that helps you do active trading effectively. Following are some points that you should consider when selecting an automated platform for active traders.

1. Connectivity to Different Markets 

If you are looking to work across various markets, you should note that every exchange may offer its data feed in a dissimilar format, like Multicast, TCP/IP, or FIX. Your software should accept feeds of diverse formats.

The point is, your automated software for trading should give you easy and reliable access to the different markets you want to trade-in. And all this should be without any additional requirements.

2. Backtesting

A Backtest is a historical replication of an algorithmic trading strategy to find out how it might have performed on the data in the past. The Backtest results usually show the strategy’s performance in terms of profits and losses that help you quantify the strategy’s return on risk. Hence an effective Backtesting software can be a great plus for your active trading.

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3. Availability of Market and Company Data 

The automated trading platform or software you choose must have an immediate market data feed along with a company data feed. It should be available as a built-in feature into the system or easily integrate from alternate sources.

After all, all trading algorithms are designed to work on real-time market data and price quotes. You can also find a few programs that are customized to account for company fundamentals data, such as earnings and P/E ratios.

4. Ease of Use 

Automated trading platforms differ greatly in ease of use. Some trading systems do need actual programming expertise. Other platforms for active trading simply need a point and click.

So, it is important to check out the platform or software’s demo to see if it fits your level of comfort before you commit.

5. Quick Availability 

Even the best trading platform will be useless if it is not working when you need it the most. So, you must check if your trading platform is instantly available to check your account’s progress, right from charts and statistics to present balances and active trades.

6. Number of Indicators 

You, being a stock trader, can use hundreds of indicators to determine which stocks to purchase and sell and when. The most powerful automated trading software will offer you many indicators for technical analysis. After all, robotic systems use these indicators to establish conditions under which online investing will take place.

7. How many Long and Short Strategies for an Account?

According to the size of the online trading platform, there can be a limit to the number of strategies that you may have loaded on each account. In case you want to run, for example, two long trading strategies, you may require two accounts.

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Similarly, you must also confirm if you have enough memory on your computer for two or more accounts. After all, experienced active traders can run two or more both live long and short strategies. Moreover, you can also get extra accounts for strategies that you are testing in a simulant mode.

8. Reliability 

You will never want to share your strategies on a platform that is not reliable. Before you invest in any automated trading platform, make sure that you have checked the reliability. Find out what safety precautions are there, like risk management in the platform and how safe your data is. Also, can you immediately rely on the software or platform provider in instances of technical issues?

9. Does Your Trading Platform Offer You Important Information?

A good automated trading platform or software will offer you information like asset pricing information, basic data, special order forms, charts, technical analysis indicators, statistics, chat rooms, and other proprietary tools or functions for the best decisions.

To conclude, once you choose suitable automated trading software for active trading, it can help you make the right moves. But while you use a trading platform, make sure that you do not leave behind your intellect. After all, it takes massive research, discipline, and patience to be successful at automated trading. It can take months to experience steady profitability.