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Stock Trading Bots to Consider in 2024

The best stock trading bots offer various features, including backtesting, control over parameters, and numerous pre-built designs to choose from.

Timing is everything when it comes to making money in the stock market. Milliseconds can make the difference between a winning trade and a loser. Traders increasingly leverage artificial intelligence (AI) and algorithmic trading systems, such as stock trading bots, to gain a competitive edge.

These automated trading systems buy and sell on stock exchanges nearly instantaneously, allowing investors to rapidly leverage any advantage to improve trading performance. Let’s explore what a stock trading bot is, the different types, how to choose one, and some of the best trading bots on the market today.

What is a stock trading bot?

A stock trading bot is a computer program that analyzes data to identify and execute the purchase and sale of stocks. Also known as algo trading bots or automated trading systems, stock trading bots provide a data-driven and disciplined approach for investors.

Benefits gained from using a bot for stock trading include:

  • Control over parameters

  • High-speed trading efficiency

  • Backtesting capabilities

  • Risk management

  • Diversification

Investors who apply a targeted investment strategy using algorithmic trading can improve portfolio performance and uncover elusive opportunities. Bots can evaluate potentially profitable options across myriad price movements and provide insights into market trends that humans might miss.

Whether you employ a buy-and-hold or day trading strategy, stock trading bots can help you optimize your approach by continuously monitoring market fluctuations and adjusting your holdings accordingly. 

Using stock trading bots, traders and investors can create money management rules that automatically execute trades when specific criteria are met. By forcing traders to take a systematic and objective approach when building their trading strategies, rules-based investing tools like stock trading bots remove emotions from the decision-making process. 

(Discover how easy it is to build trading algorithms with AI using Composer. Sign up for Composer’s 14-day free trial and get started today.)

Types of stock trading bots

You can classify stock trading bots as rules-based or AI trading bots. AI trading bots function like AI robots, harnessing machine learning algorithms to adapt to market changes and improve over time, whereas rules-based bots follow pre-defined rules to identify trading signals.

Several bot types exist within these general classifications that vary depending on their methodology. Here are three common types:

1. Technical indicator bots

Technical indicator-based bots use technical analysis to analyze indicators like moving averages to identify price trends and patterns. Rather than relying only on economic data, annual reports, price-earnings ratios, or other fundamental evaluation metrics, technical indicator bots forecast future trends based on stock price movement. Traders may use one or more indicators to establish entry, exit, and trade management configurations.

2. Experienced trader bot

Also known as copy-trading bots, experienced trader-based bots follow successful traders and copy the trades they make in the stock and financial markets. Experienced traders can set their own parameters for trades, but inexperienced traders often need more confidence to develop their strategy. Copying a successful strategy reduces this confidence deficit, making experienced trader bots popular with new day traders and beginner traders.

3. Algorithmic trading bots

Algorithm-based trading bots can execute trades rapidly and efficiently, reducing or eliminating manual errors and other mistakes. These bots employ algorithmic trading strategies using a rules-based approach to align with your trading philosophies, eliminating out-of-scope trades or emotional decision-making. By providing a systematic and logical approach to trading rules, algorithmic trading bots ensure every transaction supports your investment philosophy.

Key considerations when choosing a stock trading bot

Consider these factors when selecting your stock trading bot:

Your programming skills and language requirements

Some bots require advanced programming skills to set up and customize, whereas others feature no-code programming and intuitive controls. Before deciding, ensure you possess the necessary skill level to optimize bot performance. 

You must also understand what programming languages are required. Python, C++, Java, and R rank among the most common. If you lack coding experience, consider platforms that offer no-code strategies—like Composer.

Asset range

Different bots may work better for you, depending on your strategy and style. For instance, if you want to trade crypto, you’ll need a platform specializing in crypto trading bots, like Coinrule. Alternatively, you may want a bot that handles various classes, such as stocks, foreign exchange (forex) markets, or exchange-traded funds (ETFs).

Profitability (backtesting approach)

Past performance does not guarantee future performance, and the same holds true for trading algorithms. Still, it is a valuable indicator when evaluating your approach.

Just as you should backtest a strategy before deploying it live, you should evaluate a bot’s track record before making a decision. Backtests provide trading insights into historical performance and potential profitability.

Stock trading bots for 2024

After you determine your programming knowledge, asset range, and strategy, it's time to choose a trading bot. The great AI trading bot platforms offer various features and services at an affordable price, allowing you to experiment with different approaches and maximize your earnings. 

Composer

Composer is a no-code algorithmic trading solution that requires no advanced programming knowledge. Composer’s intelligent algorithms also let you test before you invest. It excels at capturing upside with downside protection. 

By constantly monitoring and rebalancing your portfolio, Composer’s powerful tools help investors optimize their portfolios for conditions when markets are booming and help investors to hedge risk during volatile periods. Composer offers highly customizable parameters to fit your specific algorithmic trading strategy, allowing you to tailor an approach to meet your needs.

Deposit safety is also a key priority for Composer: Deposits on Composer are protected up to $500,000 by SIPC (through broker Alpaca Securities), and BMO Harris Bank is the custodian.

StockHero

StockHero lets you test your strategy in a simulated paper trading exchange before you deploy it in the real world. This no-code bot also enables you to leverage experienced traders’ know-how by mirroring their performance.

StockHero lets you create, test, and deploy stock trading bots in minutes, so you can leverage long and short strategies, dollar-cost averaging, range-bound trading, indicators, and triggers.

Trade Ideas

Trade Ideas enables simulated trading and has different performance levels for beginner and experienced traders, allowing you to fully customize parameters and trading strategies. Currently, its platform focuses on trading in U.S. and Canadian stock markets.

Trade Ideas features stock racing—its own visual perspective on scanning the market to create real-time watch lists, see the most active stocks, and stay focused on repeat winners.

EquBot AI Watson

EquBot uses IBM Watson’s AI to make trading decisions, incorporating news articles and social media analysis. It uses machine learning, so the platform grows to understand your trading preferences over time, reducing the time it takes to customize and refine parameters.

EquBot allows you to customize portfolios globally with its portfolio as a service (PaaS), including customizing across asset classics, thematics, and environmental, social, and governance (ESG) mandates. With EquBot, you can hone in on precisely what stocks you want to trade, with options ranging from environmentally-conscious stocks to AI stocks whose parent companies invest heavily in AI technology. 

Tickeron

A subsidiary of SAS Global Corp., Tickeron uses customizable bots that provide dynamic price alerts for trade timing and stock, ETF, forex, and crypto pattern recognition. Tickeron’s pattern recognition surfaces daily top-ranked stock price patterns and provides a confidence level for trading ideas.

Tickeron’s AI lets you view bought and sold trades with potential profit and stop loss in real time. The platform also has robust trend forecasting tools that use historical price data to predict future trends along with a confidence level.

TrendSpider

TrendSpider is a favorite of many day traders who want to analyze detailed, technical stock charts and critical indicators. Its dynamic trade alerts and automated trading bots help investors time the market while eliminating time-consuming manual charting and scanning.

This platform caters to experienced and high-volume traders, meaning beginner traders may find the platform challenging.

Algoriz

Algoriz specializes in automating equity and cryptocurrency trading by connecting directly to numerous data vendors. It supports Bitcoin, Ethereum, XRP, and other currencies.

It also features a simulated matching engine to test algorithms before deployment and supports more than 10,000 trading plans.

Scanz

Scanz sends a continuous stream of trade opportunities in real time, making it an all-in-one stock trading tool for day traders and swing traders. Users can scan and sort trades manually or choose between pre-built scans to find a winning strategy.

Scanz allows you to pre-configure rules based on over 100 parameters and technical variables, leveraging over 100 news sources, wire services, financial blogs, and Securities and Exchange Commission filings.

The choice is yours

Rules-based and artificial intelligence stock trading bots can streamline trading, reduce errors, and eliminate emotion from decision-making. However, your decisions, the parameters you set, and your chosen platform will determine your success. Although you can set and forget some aspects, you must perform maintenance and tweak algorithms to capitalize on market changes. 

Ultimately, the trading bot you choose must fit your trading philosophy and tech comfort level. The more comfortable you feel using a tool, the greater your odds of success. Start your automated bot trading experience with Composer.

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