Nowadays, algorithms generate up to 70% of the stock market volume, and they are the future of trading. And the best part is that everyone can use them. The question remains, which platform is the best for developing, coding and trading automated strategies?
I’m ready for automated trading!
Every wannabe systematic trader eventually comes to a point where a choice needs to be made: a good and robust trading platform needs to be chosen. As of 2019, there is a lot to choose from. There is a handful of advanced platforms that are widely accepted worldwide by retail clients: Tradestation, Ninja Trader, Multicharts, Meta Trader, TradingView, Amibroker, and MetaStock plus NanoTrader in Europe. Apart from them, almost every day new projects pop up. They offer new features, a new type of data stream, and many more new solutions. But what they lack is a large community of traders.
What to consider?
So the first thing to consider when choosing a trading platform is a choice between something possibly better but new and something well-established, but slowly changing. The second thing is not that obvious – geography and language comes in play. English is widely accepted as a base language for communication, but as NanoTrader in Europe shows, there is still a lot of people, that like to use their mother tongue in everyday business. Lastly, we come to last but pretty much most important thing – functionality.
For simplicity, we will focus only on three trading platforms. Tradestation and Ninja Trader will represent US/worldwide and NanoTrader will be an example of European competition. No matter the community and geography the good trading platform should be: robust, easy to navigate, fast, efficient and open for automated trading.
Pros and cons.
All platforms have all the above. The important thing is the last part which is mostly achieved by programming language, which can be used to code indicators, screeners, strategies, and functions. Tradestation with its large indicators library provides a pretty much unlimited range of tasks that can be achieved with its EasyLanguage. NanoTrader’s programming language (Express) and NinjaScript both have one big advantage in the way the indicators are coded, so they are calculated more efficient. On the other hand, Express language has one big disadvantage, which is lack of custom functions. It makes the code longer because all calculations have to be done within one block. As far as NinjaScript goes, the important thing is the language style that has C#-like syntax. Advanced coders will appreciate its versatility and speed of code execution, but for beginners it might be too hard to use as a first coding language.
More pros and cons.
Tradestation offers very detailed performance report, exhaustive optimization limited to 8000 tests, portfolio testing, Monte Carlo analysis and good walk-forward optimization. NinjaTrader offers pretty much the same features, which sets the industry standards. NanoTrader’s best feature is the ability to plot an equity line over tested chart that changes right after any of the strategy parameters was changed. This way an experienced trader can quickly learn if the idea is promising or it should be discarded right away. Strategy can be tested not only within one coded strategy but by adding another strategy, stops and take-profits or blockers (indicators that allow or not for a trade to go through). It’s very easy to quickly spot the best hours for opening and closing the trade or have an idea of how wide of stop-loss in required. Also, it allows seeing if taking profit is a good idea, or trailing stop should be used instead. The main drawback is a lack of detailed optimization report, because NanoTrader uses genetic optimization, that only shows “branches” that the result climbs on.
The best that each platform offers:
Tradestation: large community and EasyLanguage, that is actually really easy…
NinjaTrader: really efficient programming language for advanced coders
NanoTrader: plotting “live” equity curve that recalculates every time the any strategy parameter changes
You will not find the Holy Grail!
So, as far as strategy testing tool the best trading platform would combine the features of Tradestation, Ninja Trader and NanoTrader. But as of today – it is still nonexistent…
Well, perfection is never achieved, so the final decision of choosing a trading platform is always a trade-off. But since everyone has different expectations and experiences, somewhere out there is definitely a perfect platform for every trader. It does not mean that it will be the same platform for everybody. Best, but time-consuming would be to try them all. It’s not possible so pick your tool, learn to use it, know its limitations and squeeze the most out of it.