Trading software allows you automate some, or all, of your online investment endeavours. Sounds great, right? As innovative as automated trading systems are, the key problem is that much of the industry is dominated by scam artists. This is why you need to perform substantial research prior to parting with your money.
In this article, not only do we review the best trading platforms for 2021, but we also explain the ins and outs of how trading software works.
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What is Trading Software?
The term ‘trading software’ can be used to describe a number of things. For example, trading software is used by seasoned investors as a means to analyze historical pricing trends and how these trends relate to the current price of the instrument. However, the general consensus is that trading software is better used to describe the process of buying and selling assets in an automated manner.
There are a number of AI trading sites that offer trading software. This could include a copy trading feature, where you automatically mirror the trades of another investor. Alternatively, trading software is also focused on the process of autonomous analysis. For example, the technology might be supported by artificial intelligence and machine learning, and it might utilize technical indicators and other chart reading tools, with the view of scalping potential trading opportunities.
Some trading software platforms go one step further. Some software, such as Bitcoin robots, scan the markets looking for specific trends and then act accordingly by placing trades on behalf of investors. Ultimately, by using cutting-edge technologies to help you trade, you can potentially increase your chances of outperforming the markets. This is especially true if you are still a newbie in the world of online trading.
There is trading software out there for just about every financial instrument you can think of, so whether you want to trade stocks or buy cryptocurrencies, there will be a software for you to try.
Best Trading Software Providers in 2021
Looking to start your online investment journey with a top trading software platform? If so, below you will find our recommended providers of 2021.
1. eToro – Copy the Portfolio of Expert Traders
Our top-rated trading software provider is eToro's CopyTrader features. Although this isn't technically software, the process still ends with the same result. The eToro CopyTrader allows you to buy and sell assets without needing to do any of the work. This is because you will be copying the entire portfolio and/or future trades of another investor.
The most important part of the process is that you get to choose who you wish to copy. You can either go with a top-performing investor picked by the editor, or you can search for traders that match your preferences. eToro breaks down the month-on-month profits and losses of the investor, as well as the types of assets that are being traded. Once you've made a decision, and decided how much you wish to invest, everything from then on is automated.
eToro is home to more than 12 million users and offers traditional financial instruments in the form of stocks, ETFs, and cryptocurrencies, as well as CFDs. This covers indices, commodities, bonds, and interest rates. As such, you'll have access to a highly diversified portfolio of markets. You can deposit funds into eToro with a debit/credit card, e-wallet, or bank account.
You will need to meet a $200 minimum deposit, and this is the same amount required to copy a trading portfolio When it comes to fees, traditional assets without leverage or short-selling come commission-free. CFDs come with an overnight financing fee, which will vary depending on the asset you are trading. Finally, eToro is a safe and trustworthy trading software platform, as it is regulated by tier-one licensing bodies based in the UK, Australia, and Cyprus.
- Automated trading through the CopyTrader tool
- More than 12 million traders to choose from
- Get started with just $200 via a debit/credit card
- All account balances denominated in USD
2. The News Spy – Fully Automated Trading Software Platform
If you're looking for a trading software platform that utilizes automated research processes, then look no further than the News Spy. As the name suggests, this automated robot will scan real-world news events. By analysing hundreds of financial-related news stories on a 24/7 basis, the underlying algo trading bot will look for potential trading opportunities. Once it does, the findings will be distributed to an in-house trader at the firm.
The trader in question will then manually review the signal and then place a trade on behalf of investors. Much like eToro's CopyTrader, this allows you to trade without lifting a finger. Only this time, the actual research process is executed by an algorithm. There are no limits to the number of asset types that the News Spy will look at, which gives the team heaps of opportunities to trade.
In terms of getting started, News Spy requires a minimum deposit of $250, which gives you access to the live News Spy trading arena. However, you don't need to start trading with real money straight away, as you can use the platform's demo facility to get used to how it works. You will, however, still need to meet the $250 account minimum to activate your profile.
- Fully automated - trades placed on your behalf
- Algorithm analyzes fundamental news events 24/7
- 88% win rate can be verified via demo testing facility
- Required to deposit at least $250 to get started
- Relatively new in the trading software space
3. AvaTrade – Mirror Trading Software
The next option available to you is to consider the mirror trading feature offered by AvaTrade. This platform is a well-respected CFD broker that has been in operation since 2006. The broker is also regulated in a number of jurisdictions, so you should have no concerns about its integrity.
In terms of its trading software offering, this works much the same as the eToro Copy Trading feature. AvaTrade allows you to choose an expert trader and then mirror their buy and sell positions like-for-like. In doing so, you'll stand the chance of earning passive income without needing to have an ounce of knowledge in the financial markets. It's also handy if you have a firm grasp of the investment scene but just don't have the time to research assets and trade throughout the day.
If you do want to use AVATrade for this purpose, you can get started with an account in minutes. You will need to cover a $250 minimum deposit, and you can deposit fund via a debit/credit card or bank account. It's best to opt for the former, as your deposit will be funded instantly. Once you're all set up, you'll get to choose an investor that operates in your preferred asset sector. This includes stocks, forex, cryptocurrencies, indices, hard metals, and energies.
- Highly trusted broker with several regulatory licenses
- Mirror the trades of pre-vetted investors
- Deposit funds with a debit/credit card
- Mirror trading services go through a third-party
- No support for e-wallets
eToro as a Trading Software Alternative: Step-by-Step Guide
If you like the sound of using a regulated broker for your trading software needs, we recommend signing up to our top-rated platform, eToro. This broker allows you to quickly deposit funds and then choose from over 12 million investors to copy across a wide range of financial markets. Once you’re all set up, you can then sit back and the CopyTrader tool do the work for you.
To sign up and begin using the trading software at eToro, follow these steps.
Step 1: Join eToro
As eToro is an online broker, you will need to open a trading account. If you have some ID to hand, the end-to-end process should take no more than 10 minutes. To get the ball rolling, head to the sign up page, open an account and provide the required details.
- First and Last Name
- Date of Birth
- Contact Details
You will then need to verify your identity. Simply upload a clear copy of your passport or driver’s license, followed by a proof of address. This needs to be a recently issued bank account statement or utility bill.
Step 2: Deposit Funds
Once your eToro account is verified, you will then need to deposit some funds, so simply click the ‘Deposit Funds’ option in the bottom left corner.
Supported payment methods include:
- Debit Cards
- Credit Cards
- Bank Transfer
As noted earlier, you will need to deposit at least $200. The minimum amount to copy a portfolio is also $200, so if you want to invest in multiple traders you will need to make your deposit in increments of $200. Finally, unless you are using a bank account to deposit, the funds should be credited instantly.
Step 3: Choose an Investor to Mirror
You now need to find an expert trader that you want to copy like-for-like. To go to the respective page, click on the ‘Copy People’ button on the left-hand side of the screen. You will then have heaps of filters to narrow your list down.
Below we have listed some of the factors that you need to consider when finding an investor that meets your needs:
- How long has the investor been trading at eToro (minimum of 1-2 years recommended)?
- What returns has the trader made on a month-by-month basis since they joined the platform?
- What assets does the trader like to buy and sell?
- Does the trader like to apply leverage?
- What risk score does eToro give the trader?
In truth, you should take as much time as you need when researching an investor to copy. With more than 12 million users at eToro, it might take some time to separate the wheat from the chaff, but the filters should help you narrow your search down.
Step 4: Activate Automated Trading
Once you have chosen an investor that you want to mirror, you need to click on the blue ‘copy’ button. This will then bring up a box that requires some details from you. This includes the total amount you wish to stake, and whether you want to copy their current portfolio, all future trades, or a combination of the two.
As soon as you confirm the order, eToro will take care of the rest. In fact, you don’t need to lift a further finger, as your portfolio will now mirror that of the investor you choose to copy. This will remain the case indefinitely until you exit the position.
Finding the Best Trading Software
We spent hours testing and reviewing hundreds of trading software platforms available online. Of all of the providers we critiqued, only a very select number made the cut. This is because the vast bulk of the industry is dominated by scam programs that make hyperbole claims.
With that in mind, below we have listed some factors to consider to assess whether or not an automated trading software provider is credible.
- Semi-Automated or Fully Automated
First and foremost, you need to assess how the trading software platform actually works. For example, is the platform like eToro and AvaTrade, where human traders will manually research and analyze the markets on your behalf? Or, does the platform use an algorithm that scans the financial markets in an automated manner? Either way, you need to have a firm understanding of how the provider functions.
- Validity of Results
Regardless of how the trading software platform operates, it is crucial that you are able to validate the results claimed by the provider. For example, if the platform claims to have an average monthly yield of 30%, is there any way for you to verify this? If there isn’t, then how do you know that the claims are true?
In the case of semi-automated trading platforms like eToro, you need to have the capacity to independently verify the investor’s trading history. No stone should be left unturned, insofar that you should be able to see each and every trade that has been made at the platform.
- Minimum Deposits and Fees
If you are using a trading software provider from outside of the brokerage space, then it’s likely that you will need to pay a fee of some sort. Some of the best providers that we came across require a minimum deposit amount in the region of $200-$300.
In doing so, this activates your membership at the platform and allows you to start automating your trades. With that being said, you don’t want to choose a trading software provider that requires a super-high minimum account balance. This is especially the case if you are unable to validate the claims made by the platform.
- Liquidity of Your Investment
It’s also important for you to assess how liquid your investment is. For example, if you use a regulated broker like eToro or AVATrade for your automated trading endeavours, then you can cash out your investment at the click of a button. This means that your investment is ultra-liquid, as you can typically turn your account balance into real-world cash in just a couple of days.
At the other end of the spectrum, some of the trading software platforms that we came across had minimum redemption periods. In Layman’s terms, this means that your money is locked up for a certain period. You should avoid such platforms.
- Deposit Options
You will need to part with some money to be able to use a trading software provider, so it’s important to assess what payment options the platform supports. We would suggest opting for a traditional debit or credit card, or an e-wallet like PayPal if its supported, as your deposit should be processed instantly.
- Assets Classes
You should ensure that you have a firm understanding of what asset classes are going to be traded on your behalf. After all, you don’t want to be buying and selling instruments if you are not comfortable with the specific asset. This might be the case if you use an automated platform that invests in high-risk assets like cryptocurrencies or exotic currencies.
There are no shortages in the online trading software space, with hundreds of providers offering their services to traders, but the vast majority of automated investment platforms are not trustworthy. This is often the case when you come across a provider that claims to have a success rate in excess of 95%, as not even the automated bots used by large-scale financial institutions make this much!
As we a result, we have picked out the most credible and legitimate training software platforms of 2021. Our top picks cover a combination of copy trading and autonomous analysis, meaning you can sit back and relax while the software trades for you. If this is something that does sound of interest, we would suggest using our pick for the best trading software platform in 2021, eToro.
eToro: Best Trading Software Platform
- Mirror top traders' portfolios with the CopyTrader tool
- Over 12 million traders to copy
- Wide range of financial assets to buy or trade
How much do trading software platforms make?
There really is no hard and fast answer to this question, as each provider makes its own claims. This could be anything from a conversive estimate of 2% per month, right up to 85% or more, though we suggest you should use regulated platforms like eToro so you can be sure the claims are reliable
Is it possible to validate the integrity of a trading software platform upfront?
Sometimes, but it all depends on the type of trading software platform that you are using. For example, copy trading sites like eToro are super-transparent, as you get to review each and every investment that the trader has made. At the other end of the spectrum, some platforms only allow you to start testing the claims after you have paid.
How do I choose which trader to copy?
In an ideal world, you should be choosing an investor that has a long-standing track record of making gains. At a minimum, this should be over the course of at least two years and has evident success in the markets. Generally, the longer, the better.
How much do automated trading software sites charge?
This all depends on the site you decide to buy the trading software from. Make sure you check the fees of a platform before signing up.
Can I manually place orders when using trading software?
Yes, some trading software providers, such as AvaTrade, allow you to manually action a suggestion. For example, the trading software might perform the research for you, and then you get to decide whether or not you act on it.