Brokers With APIs

Brokers with APIs (Application Programming Interfaces) are becoming increasingly popular with investors interested in automated trading and advanced strategies. APIs work alongside trading platforms to bring a new level of software advancement to retail investing.

This guide covers the basics of API trading, plus the advantages and disadvantages of using this type of software. Read on for a review of the best API brokers in 2024, alongside the key factors to consider when choosing a provider.

What Are APIs?

An API or “Application Programming Interface” is a software solution that sends information to a brokerage platform. By linking two applications, such as a user’s trading account and the broker’s platform, the API enables the trader to interact with the investing software. APIs can also connect automated trading algorithms to a platform as a means of giving traders live data.

Prior to the rise of APIs, potential openings had to be surveyed in one application while trades were carried out with a broker in a separate terminal. Nowadays many retail brokers use APIs, which means that traders are able to screen for openings, receive live price updates and make trades all in one place.

There are several traditional stock and futures market brokerages that support API access, such as Interactive Brokers, alongside some smaller brands. However, you are most likely to find API access offered by forex brokers who have used third-party applications and systems like MetaTrader for a long time.

If you are looking for information on APIs that are specific to your broker, you should be able to view that information on their website.

Why Use APIs?

APIs allow investors to implement trading strategies that would be difficult or time-consuming to carry out manually. Trading is time-sensitive, and using an API gives the broker and investor the means to facilitate faster reactions to the market.

For example, for those looking to practice high-frequency trading (entering and exiting positions within a matter of seconds), it’s necessary to use an algorithm and advanced trading technology. The profits for this kind of trading are based on a high number of quick and successful trades being executed, which APIs can assist with.

APIs are also useful for individual traders because they enable easy access to any financial market. APIs can be used to trade almost anything, from stocks and shares to forex, commodities and cryptocurrencies, and they improve trade speeds and efficiency in general.

Two kinds of traders use broker APIs. First, there are those who develop automated trading systems themselves, and therefore need to be able to view pricing data and place trades at the same time. Second, there are traders who use third-party applications that give access to APIs, so investors can place trades and see prices in real-time.

Benefits Of APIs

• Easy to use – APIs do not necessarily require complicated coding, and are an easy way to have two platforms communicate with one another.
• Automated trading – If you are using semi or fully-automated trading systems, then APIs will allow you to connect your algorithms with the platform that your broker offers. This means that you are able to use algorithmic strategies that would take a lot of time to set up manually.
• Data consolidation – A good API is able to bring together information from many different sources and display that information in whatever manner the investor requires. This feature is difficult to replicate manually.
• Custom indicators – When using APIs, you can automate trading signals and indicators. Custom indicators can be created using coding languages that can be found online.
• Customisation – Developers can help traders to customise APIs so that they fit their specific needs better. This typically begins with an existing API that can be modified to present the specific data that the trader wants to see.

Risks Of APIs

There are several benefits of trading brokers with APIs, but there are also some downsides that should be considered:

• Fees – Although they are offered for free, traders may incur additional charges on any gains made through an API. Ensure that you are aware of the broker’s fee structure before you start using an API.
• Learning time – For those with little experience in coding, APIs might be difficult to get the hang of. Practice using a demo account before you begin trading with an API, and consult the learning materials that can be found at the top supporting brokers.
• Limits – Often brokers will set limits that dictate how often their clients can use APIs. These limits can be set by the minute or by the hour. Limits exist because the broker has to adhere to policies that prevent them from overusing their bandwidth.
• Security – Online brokers will set up passwords that allow traders to gain access to the API, but the level of security will vary from broker to broker. While it might be tempting to pick a brokerage that prioritises the speed of the API, it’s important that you also check how secure their system is.

Comparing Trading Brokers With API Access

Here are some of the essential things to keep in mind when choosing the right API broker:

Documentation

A good trading broker should provide documentation for their APIs, so developers can find out how to authenticate and see which data is going to be made available. It is important that your chosen broker explains the API thoroughly, particularly if you are a beginner. The documentation should also include examples and code samples to help you get started.

Demo Account

Your chosen broker should offer a demo account that is accessible through the API. This will allow you to test your code and your strategies without the risk involved in real trading. This also helps you to establish whether the real trading account with that broker would be a good fit for you or not.

Coding Language

If you are using your own code, it’s important to select an API that functions in a coding language that you are familiar with, and that the program you are using can understand the output data. This is going to ensure that you can make the best use of the API and receive meaningful trading data that you can understand.

Limits & Fees

Brokers with APIs tend to have limits on their API services, so before opening an account you should ensure that the minute/hourly/daily limit is high enough to meet your trading needs. Alternatively, make sure that you are willing to pay the fees associated with exceeding these limits.

Top Trading Brokers With API Access

The best API broker for you is going to depend on your specific needs and your chosen trading strategy. However, below are some of the leading brokers with APIs in the areas of regulations, fees, customer service and trading instruments.

Pepperstone

When assessed across multiple areas, Pepperstone is one of the best overall brokers for API access.

• There is no minimum deposit amount
• Customer service is available via live chat, email and phone
• Trading available in forex, indices, commodities and shares
• The platform is extensively regulated for those living in the UK
• Trading brokerage supports the use of MT4, MT5, ZuluTrade, Web Trader, Mac and mobile apps

Interactive Brokers

This review found Interactive Brokers to be one of the top-rated API providers for forex trading.

• The platform is regulated by reputable bodies in jurisdictions around the world, including the FCA
• Trading is available on forex, ETFs, stocks, bonds, options, cryptocurrencies, futures and warrants
• There is no minimum deposit required to open an account
• There are no withdrawal fees

Keep in mind that Interactive Brokers charge a fee to inactive accounts.

IG

IG is the best API broker for beginners.

• There are more than 10,000 instruments available to trade, including forex, cryptocurrencies, stocks, commodities, indices and ETFs
• The platform offered is MT4, Web Trader and a mobile app
• Highly regulated, including by the FCA
• No withdrawal fees

Note that inactivity fees will be charged if your account is inactive for 24 months.

IC Markets

IC Markets is a good all-round API broker for beginners up to seasoned traders.

• Customer support is offered 24 hours a day via phone, live chat and email
• Investing platforms offered are web, mobile and desktop trading
• Low trading fees and no withdrawal or inactivity fees

Bear in mind that the minimum deposit for IC markets is high at $200. However, the low trading fees and lack of inactivity fee somewhat compensate for this.

Bottom Line On Brokers With APIs

Trading brokers with API access offer multiple benefits, which is why many forex traders see them as a necessity for online trading. APIs provide the tools that are needed for seamless trading, but using them without any kind of coding language can be challenging. If you are new to coding, try to build a basic knowledge of how coding works before you start trading with APIs.

Use our guide to the best brokers with APIs to get started today.

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