Algorithmic trading, or trading bots are widely used by both big institutional traders and individual day traders. Some studies have estimated as much as 70% or market trades are now being placed by bots.
For personal traders interested in algorithmic trading, there are three main options:
- Use a service or broker that supports hosted algorithmic trading.
- Download third party algorithmic trading software that supports your broker's trading API.
- Write your own algorithmic trading program using your broker's trading API.
Each has its own advantages and disadvantages. The minimum requirement to start algorithmic trading is having an account at a broker that supports a trading API, if you broker does not offer an API (or hosted algorithmic trading), then you need to use a different broker. APIs have become common with US brokers, but are not as common in other countries.