Best Algo Trading Software for Algorithmic Strategies [2024] (2024)

By: Alexander Voigt | We may receive a commission if you click on links in this article.

We may receive a commission if you click on links in this article.

Picking the best algo trading software is fundamental in developing algorithmic trading strategies and systems. As a result, institutions often decide to develop their own step-by-step set of trading rules hiring specialized developers to build trading systems by utilizing AI stock trading software.

Investors and traders prefer buying or renting algorithmic trading platforms. Having the right automated trading system built based on an existing platform has the benefit that manual coding is not required. Instead, pre-configured routines can be used, or user-friendly strategy wizards are offered for seamless development and trade execution.

Here are our favorite tools, platforms and trading bots.

Best Algo Trading Software

• Trade Ideas: Best Algorithmic Trading Platform for Day Traders (U.S. Stocks)
• TrendSpider: Best Technical Analysis Platform Based Algorithmic Trading Platform
• PowerX Optimizer: Best Algorithmic Trading Strategies for Options and Stocks
• Interactive Brokers: Best Algorithmic Trading Broker API
• Coinrule: Best Algorithmic Trading Software for Trading Cryptocurrencies With Bots

1. Trade Ideas: Best Algo Trading Software for Day Traders

Trade Ideas is the best day trading platform to evaluate, test and trade algo trading strategies. Trade automation can be accomplished using the API connection to route artificial intelligence based trading signals or self-defined trading signals to E-Trade, Interactive Brokers, or the integrated simulated trading platform.

Trade Ideas enables users to trade either fully automated or semi-automated based on pre-defined filters and strategy conditions. Once the automated trading robot identifies the trading signal, the buy and sell order can be routed automatically via API to the connected online broker for fast trading executions.

Real time market data, outstanding backtest capabilities, and the freely configurable stock scanner settings make Trade Ideas one of the best algorithmic trading software solutions for day traders. The algo trading interface is well-documented, and the integrated paper trading module can be used for risk-free testing of new strategies.

There is no coding knowledge needed to develop new strategies. The integrated filters, trade alerts, and pre-defined artificial intelligence trading signals make it easy to start with Trade Ideas.

Costs: A Trade Ideas Premium subscription for $167 per month, or $1,999 per year, is required to use the automated trading capabilities. The premium subscription includes all features, including algorithmic trading, risk assessment, backtesting, trade-from chart capabilities, price alerts, streaming market data, access to the simulated trading account with real-time data, and the trader chat room.

Special Offer: Use the promo code DAYTRADINGZ for a 15% discount during the signup process.

2. TrendSpider: Best Technical Analysis Platform Based Algorithmic Trading Platform

TrendSpider is an excellent technical analysis based platform for developing algorithmic trading systems across various financial markets in the United States. From U.S.-listed stocks to CME futures, TrendSpider has the right tools to be an effective global market data based algo trading platform.

Up to 16 charts per screen can be monitored simultaneously with different securities like stocks, futures, ETFs and indices. Hundreds of popular trading indicators are available. In addition, automated and manually usable drawing tools help to visualize price trends and support and resistance zones.

The implemented trading bots feature lets traders and investors automate strategies without writing code like #C or Python. Users can turn a trading strategy into a fully automated trading system and send trade alerts to a discord server, Twitter, or directly with a trading bot to an online broker for instant trade execution.

The TrendSpider stock screener helps find trade setups faster, and new strategies can be tested using the robust TrendSpider backtesting engine (web-based SaaS solution). In addition, TrendSpider now supports the Federal Reserve Economic Data (FRED) with detailed economic data metrics. Economic data can be visualized below a chart to identify and evaluate correlations between economic data and financial markets.

Costs: Automated trading bots are available with TrendSpider Advanced for $48 per month or $576 per year and TrendSpider Elite for $29 per month or $348 per year.

Special Offer: Go Yearly and Save 58% Off

3. PowerX Optimizer: Best Algorithmic Trading Strategies for Options

Rockwell Trading, founded by Markus Heitkoetter, developed the PowerX Optimizer, which belongs to the independently rated top ten trading systems for consistency, profitability and low risk. Rockwell Trading has over 3,500 positive reviews on SiteJabber and got an A+ Rating from the Better Business Bureau.

The platform currently consists of two tools.

The first PowerX Optimizer tool is the PowerX Analyzer, primarily designed for stock trading. It is a tool that identifies stock trading signals. The proprietary scanner lists the stocks with trading signals, including a buy-to-open price, the number of shares, stop loss level, trading strategy historical performance, win-ratio and profit factor per stock ticker. Within the platform, you see the chart with drawing tools, trading indicators and a list of all historical trades.

The PowerX Analyzer system identifies the best call and put options for a triggered trade with strike prices, bid and ask, and projections with options at stop and options at target. In addition, users can scan for various risk reward levels, stock markets and cryptocurrencies, decide whether to get only long, only short or both signals, and define multiple scanner values.

The second PowerX Optimizer tool is called The Wheel, developed with the idea in mind to help investors collect premiums by selling options to reduce the price per share bought. The options strategy is covered call trading. The idea is to buy a stock and, at the same time, sell a call option with a high premium to reduce the overall investment amount.

Usually, researching such options with specific expiration dates, strike prices and premium values takes a lot of time and requires a deep understanding of the options market. The Weel tool helps find opportunities with high annualized ROI faster. Some may think that just selling options to collect options premium without hedging with shares is the better idea, but selling options naked equals unlimited risk. Therefore, understanding the exact options strategy parameters is crucial before investing real money. The PowerX community, webinars and learning center are good places to start.

Costs: The PowerX Optimizer lifetime license typically costs $3,997. There are no recurring fees.

Special Offer: Here, you get a 50% discount on the lifetime license. The one-time payment of $1,997 unlocks permanent access to the PowerX Optimizer without any recurring fees. The offer includes a 30-day money-back guarantee.

4. Interactive Brokers: Best Algorithmic Trading Broker API

Interactive Brokers is one of the most robust brokerage solutions for algorithmic trading systems. System developers and algorithmic traders use the IB API to develop commercial finance and trading software, build custom trading apps, and integrate trading features into their existing front-ends and finance apps. Applications can be built in C#, C++, Java, ActiveX, Pythion, DDE and RTD.

The API is so popular that numerous market-leading trading software tools have already implemented API connections to Interactive Brokers. The advantage is that trading platforms, SAAS solutions and self-developed trading system front-ends can send the buy and sell orders directly from the external tool via API to Interactive Brokers for order handling.

Example: Users of Trade Ideas Pro can connect the platform directly with Interactive Brokers to execute stock trades on NYSE, Nasdaq, and AMEX. Also, Trade Ideas A.I. algorithmic orders can automatically be routed to IB’s TraderWorkstation.

Costs:There are two pricing tiers available to Interactive Brokers clients. IBKR Lite and IBKR Pro – both with a $0 account minimum. IBKR Lite caters to retail investors looking for commission-free trades on US stocks and ETFs from a browser-based platform. IBKR Pro is powered by the Trader Workstation and caters towards active traders looking to achieve the best price execution with each trade at a low cost. API connections are only possible by using IBKR Pro. In addition, IBKR Pro clients can choose between a fixed and tiered commission structure. The tiered commission structure comes with a $0.005 per share fixed, including exchange fees, and the tired commissions range between $0.0005 and $0.0035 per share plus exchange fees.

Best Offer: Click here for more details and to get started with Interactive Brokers

5. Coinrule: Best Algorithmic Trading Software for Trading Cryptocurrencies With Bots

Coinrule grants access to the world’s leading cryptocurrency exchanges and empower traders to quickly develop their crypto strategy and smart trade bot. Trading bots can be used as an algorithmic trading system for trading market movements.

With Coinrule, traders can automatically trade currencies in the crypto world by using their favorite trading strategies to compete with professional algorithmic traders.

Coinrule comes with pre-defined template strategies, portfolio risk management, multiple trading pairs per rule, paper trading, notifications via Telegram and text message, indicators, dollar cost averaging, access to the private trader community and support via chat and email. However, only the Trader and Pro plans come with priority support and the beta testing program for new features.

Costs: Coinrule comes with a free starter plan that can be used for up to $3,000 monthly trade volume. The paid plans are the Hobbyist Plan for $39.99 per month or $359 per year and the Trader Plan for $79.99 per month or $719 per year. In addition, there is a Pro Plan for $499.99 per month for heavy users.

Algorithmic Trading Software Summary

With the right algorithmic trading platforms and algorithmic trading systems in place is one of the top priorities of institutions. But only institutions have the budget to pay big teams of analysts, developers, programmers, and specialists.

Private investors and traders prefer to use algo trading strategies and automated trading systems based on pre-build software to save money and for more efficiency at a low price.

Algorithmic trading platforms offer a wide range of pre-defined trading systems, trading bots and automated trades that run on multiple operating systems. Quantitative analysis, trading strategy development based on historical data, forward testing and free trading bots are often integrated. In addition, users can create custom strategies and start algorithmic trading with the right trading plan fast.

For algorithmic trading of stocks, Trade Ideas is the best choice. Coinrule is an excellent trading platform for cryptos and automated bots, while TrendSpider is perfect for technical analysis combined with extensive economic data insights and automated pattern trading.

High frequency trading and quant trading trading benefit from excellent algorithmic trading software due to their immense IT capabilities.

Guide

Artificial Intelligence and investing have one precise thing in common – they are all about numbers. Naturally, therefore, the rise of A.I. will impact investing and trading. But will it be a real game-changer and automatically enable higher returns? What to expect in the coming years?

A.I. Is reliable, Fast and Effective

Fundamental analysis is a time-intensive task for investors. For example, manual research of key financial figures like

• Market cap,
• Earnings per share,
• Revenue or
• Profit estimates

can easily cost hours or even days of work. In addition, comparisons against competitors in the same industry and sector, cross-checking of SEC filings and supplementing technical analysis make it even more complex.

Artificial Intelligence algorithms do in seconds what investors currently do in days or weeks. Computing power is far beyond any expectations of 10 years ago. Quant investment procedures and high-frequency trading already dominate Wall Street.

Hedge funds are specialized in trading shares of Apple, Netflix or Tesla to make a profit of a cent or less per share. However, the combination of trading frequency and high-speed trading executions enables institutions to generate millions of dollars in profit, even if the profit per share is minimal.

Algorithmic Trading Software Makes A Difference

In the past, stock market analysts, investors and traders read the latest news and analyzed market trends to identify entry and exit points. These days, institutions hire armies of mathematicians to decode the market, write API protocols, and use automated trading platforms with A.I. power to determine the best trading and investment strategies in each market cycle.

Computer algorithms only know 0 and 1, while people have a gut feeling. Furthermore, humans are influenced by various surrounding occurrences and may make different investment decisions even if the fundamentals are the same.

The computer is not only more precise, but it is also way faster. That’s true for more than just analysis. It is also the case for order routing and trade executions on exchanges like the New York Stock Exchange and Nasdaq.

Hedge funds and other institutional investors pay enormous sums to have their servers and data centers as close to the physical location of the stock exchange as possible. These days, milliseconds make a real difference in trade executions and profitability.

Everything from hardware to software, skills and infrastructure needs to be perfect for the best possible results. So even less apparent things fastly become the main point of interest. Cutting edge cables, for example, push HTF traders closer to light speed.

The benefits of hollow-core fiber – the latest generation of fiber-optic cables improve the speed by billionths of a second and not more. But precisely, this speed difference decides the make or break when trading stock on Wall Street.

Algorithmic Trading Strategies: Earnings Announcement Analysis

A company listing on the New York Stock Exchange and Nasdaq comes along with various regulative requirements defined by the SEC. For example, companies are required to publish earnings every three months. Those reports are typically reported outside the regular trading hours.

Companies like Apple Inc., Amazon.com Inc. and Netflix Inc. report after market close, while other companies like Pfizer Inc. and Exxon Mobil Corporation. This way, unforeseen irrational moves in reaction to announced company figures during regular trading hours are avoided.

Decades ago, analysts began reading those SEC filings one page by the other to better understand the company’s financial situation and interpret the company’s valuation relative to the competitors and price per share. Today, A.I. is used in the financial world to read and analyze company announcements and SEC fillings.

The majority of data is comparable, like the balance sheet or various financial KPIs. But the A.I. does not only search for company finances within those fillings. The computer programs also scan for important keywords that allow conclusions about the current situation, market perspective and company outlook.

Robo Advisor Algorithmic Trading System for Retail Investors

Retail investors often use robo advisors to manage a portfolio. Artificial Intelligence algorithms often supplement robo advisors and help re-balancing portfolios automatically. This can be for a portfolio with diversified stocks or assets like exchange-traded funds.

The main benefits for investors are the low costs of using robo advisors and the comfort of getting access to a robo-managed portfolio with minimal self-managed trade execution activity. Saving time and money are great arguments for using robo advisors, while there has yet to be proof that A.I. for retail investors works better during more intense market corrections.

The market correction between January 2020 and March 2020 was too short to finally conclude how well A.I. helped investors since the market rebounded from its lows to new highs within five months. Also, the recent consolidation in the first months of 2022 did not show a big difference in A.I.-managed classicly-managed portfolios. Only time can tell if trading algorithms remarkably benefit the retail investor.

Digital Disruption Across Multiple Finance Sectors

Digital disruption changes the way we live and how we work. It revolutionizes sectors like the finance industry. As a result, more and more companies identify ways of using state-of-the-art technologies to grow into new business leaders. For young investors, it is a matter of course that companies can keep pace with the latest technological developments, be it mobile banking- electronic banking or real-time trading.

One of the latest well-known fintech trends is blockchain technology and the associated cryptocurrencies like Bitcoin, Ethereum and Litecoin. No other area in the financial sector is currently as influential as crypto. As a result, more and more platforms, services, and providers accept cryptocurrencies as payment methods, implement relevant APIs, and develop products related to the technology, like Non-Fungible Tokens.

The A.I. trend is here to stay. It will continue to influence our lives. Artificial Intelligence will help companies increase their profits, reduce risks, and develop even more valuable solutions for investors.

FAQ

Is algorithmic trading more profitable?

Yes. Algorithmic trading is typically more profitable since it reduces human error to a low level. Still, low latency internet connections, excellent trading strategies and trading tools are required, be it for stock trading, trade forex, or other securities. Our article covers the best algorithmic trading platforms with reliability for the best possible UX.

What is the success rate of algorithmic trading?

Algorithmic trading has similarities to traditional investment strategies. The development of automated strategies and algorithmic strategies is the most demanding task. Trade executions and tracking are the least challenging. The listed platforms work best for algorithmic trading of stocks, cryptocurrency and futures.