Trading stocks can be a rewarding endeavor. With the proper technical analysis, charting setup, and determination winning isn't something oblivious. In this article, we're going to look at the process of automated stock trading. We're going to show you how (and why) to use this powerful yet easy technique that will allow you to make money in the stock market while doing other things.
We'll go over the broad strokes of the four broker platforms, TD Ameritrade, Interactive Brokers, Tradestation, and Ninja Trader. Each has its strengths and weaknesses.
The main comparison includes:
TD Ameritrade is a great broker, and their Think or Swim platform is by far one of the best. It has a plethora of studies, indicators, configurations, and tools. Trading times including extended hours are from 7 AM to 8 PM. There is enough in this software to satisfy the most advanced trader and technical analyst.
Programming Think or Swim is carried out by using ThinkScript. Traders who are well-versed in programming languages can pick up Think or Swim rather quickly. For others, it will take a little time to learn the ropes.
In terms of automated trading, Thing or Swim does not natively do this within its platform, but third-party software or implementations can be achieved by its API.
IB has been around for a long time and provides many of the same features as any other highly advanced trading platform. Its trading platform is called Trader Workstation. It has the usual components that other platforms carry (candlestick charts, indicators, etc.) but it also provides an advantage to programmable traders by giving its programmers access to more than 20 programming languages!
This includes extremely easy-to-use languages like Python and MatLab. For other languages like Java or C++, it will take some time for beginners to get accustomed to. Interactive Brokers' hours of trading including extended hours are from 4 AM to 8 PM.
Automated trading is not achieved by Trader Workstation, but can be created by using an API along with various programming languages including Python. IB provides a Python library to be used with its API.
A very advanced platform, Tradestation also provides a plethora of studies, indicators, configuration tools, and charting.
In terms of programming Tradestation's language is "MART" or Market Analysis Research Toolkit. It was created by Tradestation as a proprietary language for its platform. However, some programmers have caught on to this language and use it as their preferred trading language because of its flexibility and its ability to be used across many platforms.
Similar to Think or Swim's ThinkScript tool, MART can be used by those that are familiar with programming languages or those who struggle a bit with the learning curve.
Tradestation provides one more powerful feature: Pipeline Trading! This allows traders to create automated trading strategies based on predefined rules from technical analysis.
Unlike the others on this list, automated trading is built into the platform and does not require a third-party implementation or software. This is a huge plus for Tradestation as the additional time spent on developing a "trading bot" with an API is not required.
One drawback however with Tradestation is their extended hours are less than than the others on this list as the earliest a trade can be executed in pre-market is 8 AM. The total time including all extended hours and the regular session is from 8 AM to 8 PM.
If a superhero saves the day and brings everyone together, then Ninja Trader is such in the trading universe. This is primarily because it can connect with the API of TD Ameritrade's Think or Swim and allow it to use a "trading bot" to execute automated trades.
It also has a Ninja Trader brokerage part to it, but that is another story for another time. Since Ninja Trader is a third-party tool it works on the trading hours defined by the brokers.
While this is not an in-depth look into each platform, it is a general guideline on how to achieve automated trading. Ideally, it's best to trade the maximum number of hours. Most of the highly volatile action seen during the regular session (9:30 AM - 4:00 PM) originates in the pre-market hours as early as 4:00 AM.
If you're using a "trading bot" with the proper setup scans, and execution framework, then keep in mind it will be awake by 4 AM doing what you told it to do.