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How To Build Your Own Algorithmic Trading System

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Trading is one of the most profitable and exciting investment strategies in existence. It requires years of experience and a thorough understanding of how markets work. As University HQ reports, entry-level stock brokers and traders can expect to make around $52,000 annually, while those with 20 or more years of experience can earn as much as $100,000 a year.

According to Investopedia, algorithmic trading is exactly what it sounds like; a method of trading on automated computer programs. It is a sophisticated form of trading that requires minimal human intervention.

Even if you do not have a computer science or software development background, you can still create an algorithm and make money with it. All you need to do is…

1. Learn the proper techniques of algorithmic programming and start implementing them into trading systems.

There are numerous books on the subject of algorithmic programming for stocks, but if you have no prior computer programming experience, they may confuse you more than clarify. One way to learn this complex topic that requires no computer science knowledge whatsoever is through the use of trading simulators.

As noted by the Corporate Finance Institute, a good stock market simulator serves as an excellent practice tool for making investments and trying out trading strategies. These programs are designed to replicate the activity of a live trading account without incurring any financial risk. 

2. Build custom software applications that automate the entire process of algorithm development and execution instead of manually programming every aspect by hand.

The two most popular programs used for this purpose are Microsoft Visual Basic and C++. You may need to hire a software developer to write this code for you, but it will be worth it in the end.

An example of an opportunity to order custom trading solutions – the freelance market of If you have an idea, you can contact one of the approximately 1 200 developers in the and describe your technical requirements. The community also presents a large-scale marketplace of ready-made Expert Advisors, indicators, libraries and utilities. All presented automated solutions are available in demo mode before purchase, also there are free developments, offered together with a database of articles and documentation, created for 17 years of community existence.

3. Test your system in real-time mode on a live order book with real minimums and maximums.

If you’re using the MetaTrader 5 system, you can consider using its built-in Strategy Tester — a software program for testing out your trading ideas and strategies. It allows you to write code that will run within a simulated order book with real-time pricing for stock quotations. You can test out your algorithms against live data, as opposed to dummy data that does not reflect real market conditions. 

It also allows you to test different programmatic strategies without incurring any financial risk. This is an excellent way to “practice” your algorithmic programming skills before risking any actual capital. It is also important to note that MetaQuotes proprietary MQL5 language is 99% compatible with C++, which will speed up strategy testing many times over.

4. Ensure that your system performs well in multiple market conditions and hours.

You can run live data on your simulated order book as much as you want, but it still may not be enough testing to ensure that your algorithm will perform adequately on a live trading platform. This is where trading applications with multiple test environments come in. You can configure different market conditions and testing hours for each test environment. 

5. Test your system on live markets without risking the capital

As suggested by Investopedia, if the algorithm is profitable, then use it with a watchful eye to make sure that it can operate properly in the real market. However, live trading conditions can be very different from historical conditions.

A demo account is a type of account that allows people to try out the trading strategies that the broker has to offer. Although it’s not intended to make money, it can be very helpful for people who are new to the market.  To easily find and compare the best brokers, you can check out Brokerchooser’s Find my broker tool. Most trading platforms will give you more virtual funds even if you lose all of your demo money.


Algorithmic trading is an exciting and difficult field of study. It takes time and perseverance before you can achieve any real success with it. As you learn more about algorithmic trading, find the best books on the topic, and develop your programming skills, you will eventually be able to execute a well-developed trading strategy. It may take a long time to reach this stage, but stick with it and you will be rewarded in the end.