Coding Languages for Forex Trading Automation
According to many authors, achieving success in Forex is nearly impossible without a great deal of automation. Such automation can involve market analysis tools, signal indicators, execution automation (expert advisors), and performance analysis tools. Automating any of those components, brings about verifiability, repeatability and, hopefully, reliability to the trading process — all very important to actually be profitable in the FX market.
When a trader first decides to automate something that they were doing (or planning to do) manually, they stumble upon the limitations presented by their trading platform. The limitations also apply to the coding language that should be used to create the conceived script, indicator, or expert advisor. Most traders avoid switching their trading platform and continue with automation, using the platform they normally trade in. This results in that the most popular trading platforms also end up providing the most popular coding language and tools in the industry. Which in its turn increases the popularity of the platform (hence the pervasiveness of MT4).
Yet the quality of the trading platform itself isn't always matched by the quality of the coding language and development environment it provides. For example, as of today, it is very noticeable with TradingView and their Pine Script.
Here is the brief description of options that Forex traders have nowadays when choosing a coding language for trading automation:
- MQL4 — the oldest of the coding languages developed specifically for FX automation, and probably still the most popular one in retail Forex trading. It has evolved significantly from its initial version released back in 2005. The language is C-like, but can also now work with classes and can be extended with DLL imports to perform almost any task. Coding in MQL4 is pretty straightforward but is ridden with the limitations of the MT4 platform.
- MQL5 — a younger brother of MQL4 with a lot more features and intrinsic bias to object-oriented programming. Doing simple stuff can be quite complicated with MQL5, but a huge set of standard libraries simplifies most of that. It is also much more versatile than MQL4 because MT5 as a platform is built to be a universal trading tool.
- cAlgo — the coding language of cTrader platform is based on C#, extended with lots of platform-related classes. It is much easier for an existing C# coder to switch to cAlgo than it is for an existing C++ coder to switch to either MQL4 or MQL5. However, cAlgo is still quite lacking in terms of the features available for interaction with the platform. Despite that, there are many cAlgo coders in the official community. And you can also learn from our indicators and robots tutorials for cTrader.
- NinjaScript — a bit younger than MQL4, NinjaScript is somewhat similar to cAlgo in that it extends C# too. It looks to be very popular among NinjaTrader users, but NinjaTrader itself isn't too popular with spot Forex traders, it is more a futures-oriented platform.
- Pine Script — the newest of the trading platform languages listed here. Pine Script is used to create indicators and automated strategies for TradingView, which is currently one of the most popular charting platforms itself. Pine Script certainly lacks the power of the above-mentioned languages — it is very simple. But its simplicity makes it accessible to non-coders who are interested in automating a part of their trading strategy.
- General purpose languages, such as Python, Go, R, and even C++, can (and are) used by traders to automate analysis and trading execution process. This requires some sort of connectivity between the broker's server and the program created by the developer. Such connectivity is attained via a kind of API (Application Programming Interface). Of course, not all brokers provide API access to their servers and not all traders are savvy enough to develop an app that would work that way.
- Excel (or its LibreOffice counterpart) is used quite extensively to perform market analysis based on data provided by brokers via API. It is even possible to connect an Excel spreadsheet to a MetaTrader platform running on your PC using rather simple DDE access. This requires very little knowledge of actual coding and is a great way for Excel professionals to tap into Forex trading automation.
Programming experience of most Forex traders is limited to MQL4/MQL5, cAlgo, and Pine Script. However, experiments with connecting to trading servers via API with Python, Go, and Excel also seem to be gaining popularity.
Have you ever tried coding anything for Forex platforms? You can use our forum to share more details about it. How did you learn? How difficult it was? What was the most complex program you developed for trading or analysis purposes? Which of the retail Forex platforms offer the best coding language and development environment in your opinion?
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