Internal algo trading or broker compatibility

It is also important to spend some time thinking about how your trades are actually placed. After all, the only way to trade assets online is to use a broker. With this in mind, you have two options: a provider that places trades in-house, or one that allows you to connect the bot to your personal trading accounts.

In-house algo trading

Some algorithmic trading platforms offer an all-in package. By this we mean that the provider ensures that automated trades are placed using their own brokerage accounts. In doing so, you are entitled to your share of the profits - without commission.

Let's say you invest $5,000 with the provider at a 10% commission rate. If the algo software achieves a return of 45% in the month of May, this corresponds to a profit of 2,250 USD. If you deduct the commission of 225 USD, you get a tidy profit of 2,025 USD.

Broker compatibility

Some traders prefer to have more control over their algo software investments in exness fx. Therefore, they opt for a provider that offers broker compatibility. For Layman, this means that the algorithmic bot can be linked to your personal brokerage accounts.

In most cases, the software is compatible with both MT4 or MT5, which means you can use it with hundreds of online brokers. What's more, you have full control over the entire investment process - giving you a complete bird's eye view of the bot's activities.

FAQs

Should I use algorithmic trading software for free trading?

Probably not. That is, would you spend years developing a high-end algorithmic bot that can outperform the financial markets only to give it away for free?

Can I test algorithmic trading software without risking my own money?

In some cases, yes. In fact, we prefer providers that offer an internal demo function, as this allows you to test the bot before risking your own money.

How do I know if an algorithmic trading provider is legitimate?

There is no denying that the algorithmic trading space is filled with scam providers making bold claims. Therefore, you need to do a lot of research before signing up.

How much does algorithmic trading software cost?

This can vary greatly depending on the provider's proven historical trading results. For example, you will pay a lot more for a bot with an average monthly return of 70% than you would with a bit that only yields 2%.

Conclusion

There's no denying that algorithmic software can outperform human traders in most areas. Whether it's scanning thousands of markets around the clock, providing hundreds of technical indicators simultaneously, or placing automated trades within milliseconds, the possibilities of algo bots are truly limitless.

After all, the underlying technology only performs what-if tasks. So you have the potential to make consistent profits without lifting a finger. However, you still have to spend a lot of time researching the credentials of your chosen algo trading provider, not least because the industry is riddled with scams.

To help you with this, we have reviewed three of our pre-screened algo trading recommendations, all of which have a long track record in this field.