Is It Better To Buy Or Build Your Own Automated Trading System And How To Do It?

19 min read

Trading automation helps traders analyze the market in a better and more efficient way. The automated trading system is also known as a mechanical trading system or algorithmic trading. Automated trading tools are using different types of mathematical algorithms to analyze the market data and provide accurate signals to traders.

Many of the automated trading systems can even trade currency pairs, or other assets, for you. Automated trading systems allow traders to come up with a set of rules for trade entries and exits. Once programmed, they can execute the orders automatically.

There are numerous automated trading solutions available in the market. Developed by professionals, these trading systems are very popular among Forex traders. There are many different types of auto trading systems that can help you in your trading venture. All you need to do is to download the system, install it, set your preferred settings, and let it do its job.

But, many others believe that instead of buying an automated trading system, it is better to build one of your own. However, how to build automated trading system on your own might be a confusing thing to figure out.

If you are wondering whether to create a system of your own or get a pre-made one, follow our guide and find the major advantages and disadvantages of custom and bought automated trading systems.

Advantages of a Custom-made Automated Trading System

Custom-made automated trading systems are very popular in the market. There are main reasons for this and every trader will tell you something different about the reasons behind making their decision. While there are many custom-made automated trading systems, some still prefer bought versions. For example, Ultima EA, which is an MT4 EA.

Among many advantages of using custom-made automated trading systems is the fact that they can be perfectly fitted to the individual interests of the traders. The second reason is that it is free to create your own system, and you can even sell it and make some profits.

So let’s discuss why and how to create automated Forex trading below.

It Can Be Tailor Made For Your Needs

Among many reasons why people decide to create a custom automated trading system is that they can make it truly their own. By focusing on the tools that you need specifically, you should be able to create an automated trading system that perfectly fits your trading style.

If you know which trading strategy you want to use for trading, you can focus on the things that this strategy needs to be successful. As a result, you can make a very fast and strong application that works perfectly for you.

At the end of the day, you are someone who understands your own personal needs and wants the best. When you get pre-made automated software, you most probably will be required to get used to the way it works. On the other hand, the custom-made trading system is perfectly tailored to your needs and you do not need to get used to anything new.

It’s Pretty Much Free

Other than the fact that it is perfectly tailored to your trading style and needs, it is also pretty much free. Well, that is if you know how to code of course. But, even if you are not a professional coder, you should be able to find a detailed guide on how to build an automated trading robot in Excel or another program online very easily.

As long as you manage to learn how to create a custom automated trading system, it is totally free to do so. In fact, there even are some tools that can help you make an Expert Advisor of your own, which can be used on MetaTrader 4 and MetaTrader 5 platforms.

Below, can see a pre-made Expert Advisor on MetaTrader 4. It is a very useful tool for trading automation and is used by a lot of traders around the world. There are many options available in the market, and since you can create one of your own too, it can be quite useful for trading.

You Can Sell It

The fact that creating an automated trading system on your own is already a great thing. But, this is not all. It does come with numerous other advantages. For example, if you managed to create a great automated trading system, there are a lot of people who are willing to buy automated trading systems in the market.

Thanks to this, you can sell it very easily and even make additional money from it. The best thing about this is that you can sell your trading system to as many individual traders as you like. There is always someone who is looking to buy a well-developed system, and since it is created by a trader who has used it and was proven to be successful, it should not be hard to sell it.

There are a lot of people who create automated trading systems and sell them afterward. Most of them are not even professionals in coding, but they understand what individual traders need because of their personal experience in trading.

Disadvantages of a Custom-made Automated Trading System

While there are numerous advantages associated with creating an automated trading system of your own, it does come with many disadvantages, which pushes traders away from trying to use custom-made trading systems.

Not everyone can make a well-developed trading system. Among the biggest disadvantages of creating your own automated trading system is the fact that there are a lot of chances for it to be faulty and not function the way it should. Also, it takes a lot of time to make, which many traders do not have. In addition, the trading system you create is only one version, while you can get numerous different versions of pre-made systems.

Let’s discuss the main disadvantages of custom-made automated trading systems below and see if they are a good fit for you.

It Can Be Faulty

One of the biggest advantages of trying to learn how to do an automated trading system on your own is the fact that the final product is very likely to have a lot of faults and problems that might get in the way of you trading successfully.

If you are not a professional programmer and you do not have enough experience in coding, you can make some mistakes when making it. While you might have saved some money by not buying an automated trading software, this decision might cost you some money in the long run if your automated trading system does not work properly.

In many cases, when you get an automated trading program online, they are very well checked and tested with backtesting software. In some cases, when you decide to buy automated trading software, it is very likely to have been backtested for months or even years. This is very hard to do on your own. So, before you decide to create your own auto trading system, make sure to consider this factor.

It Takes Time To Make

Another very important factor that many people simply can’t ignore is the fact that creating automated trading software takes time. Even if you are a professional programmer, it will take you some time to not only code the automated trading software but to also make sure that it works properly.

It might be free to make yourself an auto trading system, but the time that it will take you to make it perfect might be too much for many. You will be required to work on planning, designing, building, testing, re-testing, and then launching the software before it is ready to go.

It is not that you can simply click several buttons and it is done. No, you will be required to make sure everything works as it should if you want your trading software to be useful, and this can take a lot of time from traders.

If you do not have enough time to test your custom-made trading system for a long time and you can’t focus on the details, it might be better for you to go with a pre-made one, especially because there are numerous available options in the market.

It’s Only One Version

Another reason why some people prefer to buy automated trading systems online is the fact that the majority of the systems that you can find online come in different forms and updates. Mostly, you won’t be able to use the automated trading system you had created for MT4 on MetaTrader 5. If you decide to change Forex brokers and you see that the one you have chosen now does not offer MT4, you will not be able to use your custom-made trading system.

On the other hand, the trading systems that are created by professionals come in different forms to make sure that traders can use them even when they decide to change platforms. This is a very important factor that you should consider when deciding whether you should create or buy a trading system.

Simply put, if you decide to create an automated trading system of your own, you might be required to create a new one every time you decide to switch between trading platforms. This can make things quite complicated.

Advantages of a Bought Automated Trading System

Buying an automated trading system created by professionals is a choice that many traders are making every single day. There are many reasons for this decision. First of all, it is much easier to just go online, go through all the different opportunities and offerings of trading systems there are, and choose the one that fits your needs the best.

Not only does it save a lot of time, but it also offers multi-platform support, which can be very useful for traders. Also, it is very likely for bought automated trading systems to be more polished and high-quality because in most cases, there is a team of professionals who work on creating them. For example, ProfitTrailer is a great option for automated crypto trading.

Let’s discuss the major advantages of bought automated trading systems below and see if they are worth your money.

It Saves Time

The first and one of the main advantages of using the bought automated trading system is that in most cases, it will save you a lot of time. Creating your own automated trading system is a very time-consuming venture, requiring you to analyze and test out the system for your trading ventures.

On the other hand, when you buy automated trading software online, you are saving a lot of time. All you need to do is to find the one that fits your needs the best, download and install it. After this, you open your trading platform, see the settings of the automated trading tool and change them to fit your trading strategy better.

Many traders are using automated trading systems because they simply do not have enough time to sit in front of their computers and spend hours trading. If you are one of those, it is hard to see you have days or even weeks to spend on creating an auto trading system. It is only natural to get one that is already made and does not require that much time to function.

Comes With Multi-platform Support

One advantage that many might not know is the fact that the majority of the Forex trading algorithmic trading systems come in different versions. The main reason for this is to make sure that first, the users of any device can use them, and the second, to make sure that you can keep using them even when you change trading platforms.

The majority of the trading bots you can buy online can support all kinds of different trading software. So, even if you decide to change a Forex broker and end up with the one that does not offer the trading platform you used previously, you can still find a version of the trading system you used with the previous platform.

Is More Sophisticated and Polished

Whenever you decide to buy automated trading system, you are most likely to buy the one that was created by professionals in the market. Not only are these people experienced in the Forex trading market, but they are also professional developers working on coding.

Because of this, it is only natural to think that the trading system created by professional developers will be more sophisticated and polished compared to anything else you can find in the market.

No matter how good you are at coding, a team of developers can still make a better-automated trading system simply because of their experience and skills. A great example of a sophisticated and polished bot is TradeSanta which is very popular.

Disadvantages of a Bought Automated Trading System

While there are many advantages of using a bought automated trading system, there are some other things that you should consider before deciding that it is for you. Many disadvantages might lead you to decide to create one of your own. Because of this, it is very important to know the disadvantages of using a bought trading system.

Among the main disadvantages of using a bought automated trading system is that it can cost a lot, can be quite hard to find the tools you might need, and you will be required to learn how to use them, which can take you some time.

It Costs A Lot

One of the biggest disadvantages of using bought automated trading systems is that they can be quite costly. Whenever you try to find yourself a bought version of an automated trading system, you should be ready to pay around $200 or even more on monthly basis. While there are some cheaper options, it’s hard to get a well-developed and high-quality automated trading system cheaper than $200.

Because of the high costs, many people prefer to make their auto trading systems custom-made. On the other hand, some believe that getting a high-quality auto trading system is worth the price.

At the end of the day, the decision is yours to make. Make sure to understand your personal needs and preferences because something that works for others, might not be a perfect fit for you.

Hard To Find The Tools You Need

Another big disadvantage to buy automated trading software is that in most cases, it turns out to be very hard to find the tools that you need for your personal preferences. The thing is when professional developers are creating automated trading software, they are mostly focused on the general needs of traders rather than the personal needs of individual traders.

This is a very natural thing but can be quite hard for individual traders. If you have some type of specific need in the trading market or you are using a very rare trading technique or strategy, it might be very hard to find a strategy that works well for you.

If you are one of those traders using specific trading strategies, it might be a better option for you to get a custom-made trading system that is tailored to your personal needs so that you do not spend a lot of time looking for a perfect automated system.

Learning Curve

Whenever you are buying an automated trading program, you will be very likely to have to learn how to do automated Forex trading with that specific system. Not every automated trading software is the same, in fact, the majority of them are very different from one another with the things that they offer.

These trading systems mostly have a learning curve, which means that you will be required to learn how they work before you start using them. This can be quite a challenging thing for many Forex traders.

On the other hand, getting yourself a custom-made trading system would not require learning because it was made by you specifically for you and it is something that you already know how to use. So, as much as buying automated trading systems can be time-friendly, they do require some attention from you to use them properly.

How To Build Your Own Automated Trading System

Learning how to how to set up automated trading MT4 or for any other platform takes a lot more than simply knowing to code. When creating an automated trading bot, you want to create a system that is able to not only trade but also backtest and do all the things you want it to do.

Creating automated trading takes a lot of time because it requires a lot of market analysis. First of all, you will need to have all of your data correct. For this, you can connect with a database from one of the brokers or trading platforms, where you can get historical data of the market. Then, you should decide which asset you want your bot to trade and find a strategy that it fits.

An easier thing to do is to use one of the existing APIs with a lot of historical data. After this, you will need to use a pre-existing platform, which will allow you to do backtesting. On the other hand, if you want to create something truly unique and yours, you can also create a platform of your own, which might be harder but it is worth it for many traders.

After this, you can continue by researching and truly understanding the strategy you are using. A very important thing is to find something that works for you personally. While there might be many strategies in the market, many of them might not work anymore in the current market conditions. After this, you will need to convert your strategy into pseudo-code. This is basically the process of telling a computer what you want it to do and is one of the important things when trying to understand how does automated trading on MT4 work.

After this, you will need to bring your ideas and platform together and test the strategy. This is the process that will take you the longest time as it might take you months, or even years to test the strategy well before using it.

After you are done with all of these, the time has come for you to connect it to your demo or live account and let it trade in the real market. In these few but not easy steps, you can get yourself a working automated trading system.

So – Which One Is Better?

In this detailed guide to how to do automated trading, we have discussed all the sides of both using bought automated trading systems or using custom-made ones. As we were able to find out, both of them come with specific advantages and disadvantages.

While the bought automated trading platform is more likely to be more sophisticated and well-developed, it can get quite pricey. On the other hand, creating a trading system on your own can be totally free, but it can take months, or even years to create a well-developed trading system.

At the end of the day, deciding which one to use is a very personal decision and the final choice is up to you. While for some traders it might be better to get automated trading software online, for others, a custom-made one can be a better fit.

Frequently Asked Questions on Automated Trading Systems

How do I automate my trading system?

There are different options you can choose from for trading automation. You can go online and buy an automated trading system for your trading ventures, or make one of your own. Trading automation can be very helpful for traders who do not have enough time to sit in front of their computer and trade Forex the whole day. Whether you create or buy automated trading software is totally up to you and depends on your personal preferences and needs.

Are automated trading systems legal?

Yes, automated trading systems are completely legal. If you are able to trade Forex, you are most likely also able to use automated trading systems without any issues. All you need to do is to decide which one fits your personal needs the best, install it on your trading platform, or create one on your own if you can’t find a perfect option for your personal trading ventures.

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