- How share trading bots work.
- Pros and cons of share trading bots.
- Share trading bots analyzed in summary and detail.
- Questions to ask before deciding which share trading bot to choose.
Automated share trading systems – also known as share trading bots – can be used in conjunction with an online broker to deliver advantages that are not available when trading manually, but they do not guarantee that you will make profits or avoid losses.
Buying and selling strategies and decisions are based on computer algorithms used to process millions of pieces of data – from market information, news, and even social media – and then execute trades, either automatically by connecting to a user's online broker, or by giving buy/sell signals and leaving the user to make the final decision about whether to make the trade.
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Pros and cons
- They can be used by inexperienced investors who would not be able to make buy/sell decisions based on market knowledge.
- Emotion is removed from trading decisions. Profits and losses are designed to be taken at optimum times, rather than being directed by gut feelings.
- Trading rules can be stipulated by the user. For example a rule to sell when a specific price or profit percentage has been achieved, or sell at a particular loss price or percentage. Rules are then executed with discipline. “Plan the trade and trade the plan.”
- Order entry speed is accelerated, which is important when a few seconds can make a big difference in a fast-moving market.
- Multiple accounts and strategies can be executed at one time, which helps to spread risk for advanced traders.
- Internet connection failures can happen, throwing your strategy into disarray.
- Monitoring of performance is still required, to make sure your trading parameters are operating as you expected.
- Successful trading performance is not guaranteed, so it’s still possible to make losses.
- You need to set your own trading rules to produce a strategy, unless you adopt a pre-designed strategy created by the bot platform.
- Scams abound, so do careful research before deciding which bot to use.
8 questions when choosing a stock trading bot
- Do I want a fully-automated system (i.e. ‘set and forget’) or just timely signals to tell me when to buy, sell or hold?
- Does the stock trading bot connect with my online broker?
- How easy is it to set up my trading strategy?
- Is backtesting available?
- Is there a demo account so that I can try it first without risking cash?
- Which markets or exchanges does the bot cover?
- How much does it cost?
- Can I try a monthly subscription first before switching to an annual discount plan?
Our pick of the best stock trading bots
MetaTrader 5 is owned by MetaQuotes Software Corp, a private company headquartered in Cyprus and founded in 2000 by Renat Fatkhullin.
Following on from the success of MetaTrader 4 for forex trading, MetaTrader 5 accommodates more asset classes, including stocks. You can subscribe to signals from successful traders, or manage your trading account using any one of thousands of third-party pay-for-service trading robots, listed on the site and unconnected with MetaTrader 5 or its parent company. These external traders and robots are presumably the source of its revenue since you can download and use MetaTrader 5 for free.
Headquartered in Providence, Utah, TradeMiner was developed by Gecko Software Inc., which was founded by Lan Turner in 1998.
Recognising the persistent seasonal effect in stock returns, TradeMiner software identifies historical market cycles and seasonal trends. The platform allows you to scan 40+ years of market data to find historical trends that match your search criteria. Create custom groups based on filters like price range, volume, P/E, sectors and industries.
Purchase the software for a one-time payment of $194, or $97 if you only want stocks data, without futures or forex. It includes data for the most recent year, but to keep adding subsequent years you will need to pay an additional $129 per year ($99 per year for stocks data only.)
Founded in 2017 by Harsha M, Jayalakshmi Manahar and Vipul Divyanshu, with headquarters in India, Streak allows traders to create trading algorithms without needing to understand coding, backtest them before using live, and then use them live in the stock market. Once the strategy indicators are met, alerts are issued so that trading action can be taken immediately.
There are three plans to choose from:
- Basic. $16 per month for 200 backtests per day, 25 deployments at one time, 5 entry/exit conditions, and 70+ technical indicators.
- Premium. $224 per month for 500 backtests per day, 50 deployments at one time, 7 entry/exit conditions, 70+ technical indicators, and access to Heikin-Ashi trading strategy.
- Ultimate. $32 per month for 1000 backtests per day, 100 deployments at one time, 10 entry/exit conditions, 70+ technical indicators, and access to Heikin-Ashi trading strategy.
Created in 2013 by Stanford University-educated Michael Seneadza when he was looking for new stocks to trade as well as ways to manage the ones he already had, SwingTradeBot aims to help you stay on top of the market by watching your stocks, scanning the market for technical developments and alerting you when it’s time to take action.
Stock screeners help you to find stocks matching your trading style, and find overbought and oversold stocks, breakouts and pullbacks. Broad market analysis recaps each day’s main action, standout stocks and unusual activity. Get end-of-day email updates on your stocks, view recent IPOs and Trader Mike’s Notes.
Choose from four pricing plans:
- Silver. US markets only. Free access to non-pro stock scans, one watchlist, one portfolio, some basic scanning and a weekly email. US exchanges only.
- Gold. $19.99 per month or $189.99 per year. Access all stock scans, two watchlists, two portfolios, full scanning and full access to Trader Mike’s notes. US exchanges only.
- Platinum. All the features of Gold, but with unlimited watchlists and portfolios. $24.99 per month or $239.99 per year. US exchanges only.
- Multi-market. Platinum plan access to exchanges in the US, UK, Australia and Canada.
Algoriz has its headquarters in New York City. It was founded in 2015 by Soraya Taghavi, who previously held senior positions at Goldman Sachs and Millennium Partners hedge fund.
Design your own executable strategies simply by typing in your ideas in plain English, or use Algoriz standardized strategies. Test your data on a simulated matching engine, including commission and slippage models for greater accuracy. You can fully automate your trading with a secure connection to your broker account, or turn on alerts to receive a notification when your signals trigger.
Choose from three pricing levels:
- Lite. Free for beginners. Permits two algorithms, one screener, and a one-year backtest period.
- Professional. $29 per month for 10 algorithms, five screeners, and a backtest period of five years or more.
- Premium. $69 per month, unlimited algorithms and screeners, and a backtest period of five years or more.
TrendSpider was founded in 2016 by Dan Ushman, Jake Wujastyk and Ruslan Lagutin. It is a global operation, with staff in Chicago, Denver, India, Russia and Ukraine.
It lets you customize and automate technical analysis you would otherwise have to do by hand, powered by algorithms, formulas and math. MarketScanner helps you to find actionable chart patterns. Algorithms watch your chart setups in real-time and execute trades with precise timing. Backtest using 27 years of historical data. Apps are available for Android and iPhone.
There are three plans available:
- Premium. For active traders who have a day job. $44 per month or a discounted $397 per year. Includes two workspaces, 25 alerts (14-day expiry) and a minimum scanner timeframe of one day and up, but no backtesting.
- Elite. For experienced, frequent traders. $87 per month or a discounted $697 per year. Includes four workspaces, 100 alerts (30-day expiry) and a minimum scanner timeframe of one minute and up, plus backtesting and more
- Advanced. For professional, full-time and career traders. $131 per month or a discounted $897 per year. Includes six workspaces, 200 alerts (90-day expiry) and a minimum scanner timeframe of one minute and up, plus backtesting and more.
MetaStock software was first released way back in 1982, by Steve Achelis of Equis International. Equis was acquired by Reuters in 1996, and in 2013 the MetaStock software was acquired by Innovative Market Analysis LLC, based in Salt Lake City, Utah.
The software comes in two versions – MetaStock Daily Charts for end-of-day analysis, and the self-explanatory MetaStock Real Time. Its flexible tools help you to scan the market to identify current opportunities based on your criteria, backtest your strategies, and forecast future price action based on past events.
Pricing is as follows:
- MetaStock Daily Charts software costs $499 to purchase, plus there’s a subscription cost of $69 per month or $749 per year for North/South American data (less for other regions).
- MetaStock Real Time is available as a one-time purchase for $1395, or a monthly subscription of $100. You’ll also need to purchase a separate subscription to XENITH live news service ($150/month for North/South American data.)
MetaStock has received multiple Readers’ Choice awards from the Technical Analysis of Stocks and Commodities magazine, plus PC Magazine’s Editors’ Choice Award.
Based in Cornelius, North Carolina, VectorVest was created by mathematician Bart DiLiddo, PhD, from mathematical models he started work on in 1978. DiLiddo discovered a way to sum up stock price influencing factors in mathematical models relating to value, safety and timing. The result is a stock analysis and portfolio management system that analyzes and ranks over 18,000 stocks every day, looking at those three factors of value, safety and timing. Every day it gives a clear buy, sell or hold rating on every stock.
The available products are:
- VectorVest 7 Enhanced. 15-minute delay analysis and market timing, mobile app. $9.95 for first 30 days, then $99 per month or $995 per year.
- VectorVest 7 Premium. Real-time analysis and market timing, mobile app, plus ProTrader, AutoTimer and Watchdog. $9.95 for first 30 days, then $149 per month or $1,495 per year.
Eric Pharis, holder of a Master’s in Operations Research and Financial Engineering from Cornell, and Gust Kepler, former investment banking consultant, founded BlackBoxStocks in 2014. It is headquartered in Dallas, Texas.
It works by using "predictive technology" enhanced by artificial intelligence to find volatility and unusual market activity that may result in a rapid change in the price of a stock, before the NASDAQ, NYSE, AMEX and other exchanges open. Clicking on a symbol reveals why the stock received an alert. Watch top traders’ live channels to get trading ideas and strategies. Get up to speed at BlackBox Bootcamp and receive special commission rates or privileges at TradeStation, E*Trade, Tastyworks and Ameritrade brokers.
The service costs $99.97 per month, or a discounted $959 per year.
Tickeron, Inc. is based in Reno, Nevada, and was founded by Sergey Savastiouk in 2011. It currently has 30 employees.
It offers AI Robots – Algorithmic trading software for stocks and ETFs (as well as crypto and forex). You can choose to follow a ticker (or several) such as Swing Trader, Volume Trader, Best of the Best Growth Stocks, Day Trader Stock, and get signals about when to buy or sell. AI Real Time Patterns let you find entry/exit prices and confidence levels, while AI Trend Predictions advise on likely price movements. There’s also a marketplace for experts and advisors to sell their services to potential customers.
There are four membership types:
- Beginner. No fees, and includes Morningstar aggregation services, portfolio creation, set-up and receive alerts, and AI investment Ideas.
- Intermediate One. $100 per month ($60 if paid annually). All Beginner services plus daily buy/sell signals, AI screener and model portfolios. Pay additional charges for optional extra tools, such as AI Robots, AI Patterns, AI Trend Prediction, and more.
- Intermediate Two. $210 per month ($126 if paid annually), for services including most of the optional extras.
- Expert. $250 per month ($150 if paid annually) including all of the optional extras.
Some optional extras are available on a 14-day free trial. There is an Android mobile app available.
Trade Ideas was founded in 2003 by a team of financial technology entrepreneurs, including Dan Mirkin, David Aferiat and Philip Smolen. Its headquarters are in San Diego, California.
Its AI-powered robo-advice uses many different investment algorithms, subjected to over a million trading scenarios overnight, to produce a subset of stocks that are most likely to outperform the market in the next trading session, including suggested entry and exit signals. You can also build trading strategies and automate them through your Interactive Brokers account. Test drive with simulated trading.
- Standard. Real-time simulated trading, live trading room, real-time streaming trade ideas, 10 simultaneous charts, price alerts. $118 per month or a discounted $999 per year.
- Premium. All the features of the Standard plan, but 20 simultaneous charts, plus suggested entry and exit signals, AI virtual trading analyst, chart-based AI assistance, risk assessment, backtesting and autotrade. $228 per month or a discounted $1,999 per year.
Based in Brea, California, Stocks to trade was founded by Timothy Sykes in 2009.
Connect StocksToTrade to your broker for fast execution of alerts created by a custom-built trading algorithm, Oracle. You can also choose to trade in 15 selected stocks. Test your strategies first without risking your cash. Get updates on stocks chatter on Twitter and other social media. Learn how to trade like a pro with StocksToTrade ‘university’.
Pay $179.95 per month, or get a discount by paying $1,899.50 for annual membership.
Kavout was founded in 2015, with headquarters in Seattle, WA, and offices in Beijing and Shanghai. Information on its website says its founders (one of whom is Alex Lu) formerly worked at Google, Microsoft, Baidu and fintech firms, and have 20 years of experience in developing big data, natural language processing (NLP) and machine learning.
Kavout is an investment platform driven by AI, to allow investors to create efficient portfolios based on data analysis. Its AI machine, dubbed “Kai”, examines millions of data points from stock quotes and filings, news, blogs and social media, and allocates a score based on the stock’s attributes and future performance potential. There’s also a Watchlist option, plus a stock screener with pre-determined strategies, or you can create your own. You can test your portfolio and strategies in a demo mode before risking your cash. Experienced traders will have no problems with the terminology used on the site, but beginners may find it difficult to navigate at first.
There is no information on the website about the cost of the service. Instead, it suggests starting with a free account with some limited functionality, and then making contact if you are interested in purchasing premium data via a one-time fee or by subscription.
Want to trade the crypto markets with a bot? Check out our review of the best crypto trading bots.
Are stock trading bots worth it?
TL;DR Stock trading bots can be worth it, but more so for those trading larger accounts. If you're trading a small account, the bot's fees might negate any marginal gains.
Here are some thoughts on what to consider if you are deciding whether or not to proceed with a bot.
Initial investment and ongoing costs
- Setup costs. There may be an initial purchase price or setup fee, which can range from a few dollars to several hundred or even thousands. More sophisticated and customizable bots tend to cost more.
- Subscription fees. Some bots operate on a subscription model, requiring monthly or annual payments. These fees can add up, especially if you're not trading frequently or in large volumes.
Potential returns vs. costs
- Volume and frequency. The more you trade, the more opportunities there are to recoup the costs of the bot and turn a profit. If you have a small account and trade infrequently, the bot's fees will eat into your returns and make the whole enterprise less cost-effective.
- Profit margins. An improvement of one or two percentage points on a large account can make a significant difference. For instance, a 2% increase on a $100,000 trade is $2,000 – easily enough to cover the cost of many bots. However, the same percentage on a $1,000 trade is just $20, which only really makes financial sense when trading a small amount frequently.
Efficiency and automation
- Time savings. Bots can execute trades faster than humans. For some traders, the time saved is worth the cost, even if the financial returns are marginal.
- Passive income. Bots can trade markets from the moment they open until the closing bell, which can be of meaningful benefit to people living in inconvenient timezones for markets they want to trade.
- Emotional detachment. Bots are not driven by emotional stimuli, so they trade without the fear, greed, and bias that affects human traders.
Learning and maintenance
- Strategy adjustment. Today's winning strategy might not work tomorrow, so bots require monitoring and updates in response to market conditions. If you're not up to this task, there might be additional costs involved in hiring someone who can.
- Technical knowledge. While there are beginner-friendly stock trading bots, some require a fair bit of technical know-how to configure and operate effectively.
What exactly is a stock trading bot?
Stock trading bots are sophisticated software that use algorithms to analyze vast amounts of historical and live market data, news, and even social media posts. They are designed to make informed trading decisions, either by directly executing trades through an online broker or by signaling the user with buy/sell recommendations.
How do trading bots differ from manual trading?
Manual trading relies on — and is limited by — human intuition and analysis. Stock trading bots, however, operate on predefined algorithms and do not experience fatigue, analysis paralysis, indecision, or impulsive decision-making.
What are AI stock trading bots?
Some stock trading bots use AI to improve insights and learnings from data patterns, then adapt their strategies over time. Rather than simply trading based on a fixed set of rules, AI-powered trading bots can adjust their algorithms as new data and insights become available. This, in theory, makes them responsive to markets and increases the accuracy of their predictions.
How much does it cost to use a stock trading bot?
Trading with a free bot is not for the feint of heart. The best stock trading bots are not free. Typically they charge either a one-time purchase, a monthly subscription, or annual fees. Some paid bots offer free trials with limited functionality, allowing users to get a feel for the platform before committing financially.